2.3

Question 1

market

Answer 1

Arrangement that allows buyers and sellers to exchange things

Question 2

specialization

Answer 2

Concentration of efforts of individuals and businesses to a limited number of activities

Question 3

free market economy

Answer 3

economic system that answers the 3 economic questions based on voluntary exchange in markets

Question 4

household

Answer 4

person or group of persons living on a single residence

Question 5

firm

Answer 5

organization that uses resources to produce products/services that it sells

Question 6

factor market

Answer 6

area in whcih firms purchase factors of production from households.

Question 7

product market

Answer 7

Area of exchange in which households buy goods and services from firms.

Question 8

adam smith

Answer 8

Economic philosopher who is the father of capitalism

Question 9

self interest

Answer 9

Individual’s own personal gain

Question 10

incentive

Answer 10

Hope of reward or fear of penalty that encourages people to behave on a certain way

Question 11

competition

Answer 11

The struggle of producers for the dollars of the consumers