American Free Market Economy

Question 1

what is the study of economics?

Answer 1

The study of consumer choices, resources, and markets

Question 2

what is scarcity?

Answer 2

lack of resources

Question 3

what does it mean to make a choice?

Answer 3

selecting an item or action from a set of alternatives

Question 4

place that goods or services are bought or sold

Answer 4

merketplace

Question 5

what is opportunity cost?

Answer 5

what is given up in a choice

Question 6

what are the 4 types of resources?

Answer 6

Natural, human, capital, entrepreneurship

Question 7

what is the definition of resource

Answer 7

factors of production, like land, labor, or money.

Question 8

items found in nature

Answer 8

natural resources

Question 9

individuals who provide the labor

Answer 9

human resources

Question 10

things owned by the business, such as buildings, equipment or land

Answer 10

capital resources

Question 11

the people who take risks to start a business in search of a profit

Answer 11

entrepreneurship

Question 12

what is production?

Answer 12

Combining resources in the process of creating goods

Question 13

what is consumption?

Answer 13

using the goods produced

Question 14

determined by resources available and by what consumers want

Answer 14

Production

Question 15

What are the 3 economic questions that all countries must answer to determine the type of economic system the country has?

Answer 15

What will be produced?
How will it be produced?
For whom will it be produced?

Question 16

leads every country to make decisions about use of its resources

Answer 16

Scarcity

Question 17

what are the 4 types of economic systems?

Answer 17

traditional economy
free market economy
mixed economy
command economy

Question 18

each type of these have varying amounts of government control

Answer 18

economic systems

Question 19

what is a traditional economy?

Answer 19

decisions made based on custom or tradition
common for people to do similar work as their parents
less demand of resources

Question 20

what is a free market economy?

Answer 20

decisions largely made by individuals and business owners
little government involvement
private ownership of resources
businesses make decisions based on profit motive or money
competition

Question 21

Control is in the hands of consumers because their purchases determine what is produced

Answer 21

consumer sovereignty

Question 22

what is command economy?

Answer 22

decisions are made by a central organization usually the government
resources and property are owned by government
lack of consumer choice

Question 23

What is a mixed economy?

Answer 23

more government involvement than free market but less than command
includes private and public sectors
made of public and private sectors

Question 24

What are the public and private sectors?

Answer 24

private sector- businesses make decisions
public sector- government makes decisions

Question 25

what type of economy does the United States have?

Answer 25

mixed economy

Question 26

what are free markets in the US economy?

Answer 26

where goods and services are bought and sold
operate with little interference from the government

Question 27

what are the five distinct characteristics of the US economy?

Answer 27

Free markets
Private property
profits
competition
consumer sovereignty

Question 28

what is private property?

Answer 28

individuals and business may own the land, buildings and/or resources in order to produce goods and services with little government interference

Question 29

how does the interaction of supply and demand determine price?

Answer 29

If supply is low and demand is high for a good or service, then the price goes up. If the demand is low but the supply is high then the price will be low because the producer will want to incentive consumers to buy it or increase demand for it.

Question 30

what are the 3 types of business structures?

Answer 30

proprietorship
partnership
corporation

Question 31

person who takes the risk to start the business in search of profit

Answer 31

entrepreneur

Question 32

what is a proprietorship?

Answer 32

Business with one owner

Question 33

what is a partnership?

Answer 33

Two or more owners

Question 34

what is a corporation?

Answer 34

Acts as a legal person regardless of number of owners
not responsible if the buissness fails