Chapter 1

Question 0

decision making process

Answer 0

1) define the problem 2) identify the choices 3) evaluate advantages and disadvantages 4) choose one 5) act on your choice 6) review your decision (reflect)

Question 1

opportunity cost

Answer 1

the value of the next-best alternative that you did not choose

Question 2

Three economic questions

Answer 2

1) Whats goods/services will be produced 2) How will the goods and services be produced? 3) What needs and wants will be satisfied with the goods and services produced?

Question 3

command economy

Answer 3

resources are owned and controlled by the government

Question 4

market economy

Answer 4

resources are owned and controlled by people of the country

Question 5

traditional economy

Answer 5

goods and services are produced the way it has always been done

Question 6

capitalism

Answer 6

refers to the private ownership of resourced by individuals rather than the government

Question 7

mixed economy

Answer 7

combines elements of the command and market economies

Question 8

market price

Answer 8

The point where supply and demand are equal