Chapter 1 Review

Question 1

Circular flow diagram

Answer 1

Households receive goods and services from firms and then households pay the firm.

In labour markets households provide labour and firms pay households for the labour.

Question 2

Command economy

Answer 2

The government controls what comes in or out of the country and controls its resources. Command economies are very centralized and a market economy is where decision are decentralized

Question 3

Division of labour

Answer 3

When workers divide tasks up to produce a good or service. The more division of labour you have the higher productivity will be , because of specialization and economies of scale

Question 4

Economies

Answer 4

Study of how humans make choices under pressure of scarcity .

Question 5

Economies of scale

Answer 5

The amount it costs to produce an individual unit, declines as total output increases.

Question 6

Exports

Answer 6

A country sells a product or good to another country.

Question 7

Fiscal policy

Answer 7

Policy on how governments spend money on resources and collect taxes.

Question 8

Globalization

Answer 8

When country’s expand politically, culturally. The economic connection between people around the world.

Question 9

Goods and services market

Answer 9

When firms buy stuff from other firms but almost when firms are sellers and households are buyers.

Question 10

Imports

Answer 10

A country buys a good or service in which this good or service was made in a foreign country.

Question 11

Labor market

Answer 11

Households sell their labor to firms and firms pay households for that labour.

Question 12

Macroeconomic

Answer 12

Broader look in economics in which it looks at growth,inflation and unemployment and trade balance.

Question 13

Inflation

Answer 13

When an average price of a product in the economy slowly increases

Question 14

Market

Answer 14

Interaction between buyers and sells and also the relationship between demand and supply

Question 15

Market economy

Answer 15

Canada is considered a market economy. When economic decisions are decentralized, private individuals own resources and business sells goods and services based on demand.

Question 16

Microeconomics

Answer 16

Area of economics where it focus on business firms, households and workers. They basically focus specific areas in economics.

Question 17

Monetary policy

Answer 17

A policy that alters levels of interest rates, availability of credit in the economy and altering the extent of borrowing

Question 18

Private enterprise

Answer 18

Private groups or individuals own and operate means of production. Government owned businesses in which they are called crown corperations

Question 19

Scarcity

Answer 19

When the human wants exceed the given supply of goods and services.

Question 20

Specialization

Answer 20

When workers or firms focus on an individual task in which they are well suited for, in the production process.

Question 21

Theory

Answer 21

Representation of an object or situation in which they simplify but still include important features of it to explain the concept.

Question 22

Traditional economy

Answer 22

An economy in which things have always been the same and don’t change. The individuals often have social bonds and there is also barter and direct trade.

Question 23

Underground economy

Answer 23

Buyers and sellers make transactions basically under the table or they try to avoid government regulations.