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Economics Midterm > Chapter 2 > Flashcards

Chapter 2 Flashcards

0
Q

3 key economic key questions:

A
  • What goods and services should be produced?
  • How should these goods and services be produced?
  • Who consumes these goods and services?
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1
Q

_____ _____: the method used by a society to produce and distribute goods and services

A

Economic system

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2
Q

_____ _____ are the income people receive for supplying factors of production

A

Factor payments

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3
Q

Economic efficiency is all about making the most of _____

A

Resources

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4
Q

Freedom from government intervention in the production and distribution of goods and services is _____ _____

A

Economic freedom

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5
Q

Economic equity refers to fair distribution of _____

A

Wealth

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6
Q

Economic growth and innovation leads to a higher _____ __ _____

A

Standard of living

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7
Q

All nations have some sort of _____ _____

A

Economic goals

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8
Q

A _____ _____ is an economic system that relies on habit, custom, or ritual to decide questions of production and consumption.

A

Traditional economy

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9
Q

In a _____ _____ economic decisions are made by individuals and are based on exchange, or trade.

A

Market economy

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10
Q

_____ _____ are ran by solely the government

A

Command economies

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11
Q

_____ _____ are market-based systems

A

Mixed economies

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12
Q

A _____ is a forum for buyers and sellers to exchange products

A

Market

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13
Q

We are not _____-_____

A

self-sufficient

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14
Q

People have _____

A

specializations

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15
Q

A _____ _____ is one that is based on voluntary exchanges

A

Free market

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16
Q

_____ own the factors of production and are the consumers of goods and services

A

Households

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17
Q

A _____ is and organization that uses resources to produce a product.

A

Firm

18
Q

When firms purchase the factors of production from households it is called the _____ _____

A

Factor market

19
Q

The _____ _____ is where the households purchase the goods and services from the firms

A

Product market

20
Q

Adam Smith first noted that people operate in the market considering only their _____ _____

A

Self interest

21
Q

We look for _____ in the market.

•Monetary vs. nonmonetary

A

Incentives

22
Q

Incentives are at the heart of _____ in the market

A

Competition

23
Q

Adam Smith referred to the self-regulating nature of the market as…

A

The invisible hand

24
Q

_____ _____ is the idea that consumers decide what gets produced

A

Consumer sovereignty

25
Q

_____ _____ economies oppose private property, free market pricing, competition, and consumer choice

A

Centrally planned

26
Q

In this economy, the government owns the _____ and _____

A

Land, capital

27
Q

Consumer choice and competition is completely _____ from the system.

A

Absent

28
Q

_____ is a belief that democratic means should be used to distribute wealth equally throughout society

A

Socialism

29
Q

_____ a centrally planned economy with all economic and political power resting in the hands of the central government

A

Communism

30
Q

Socialist countries can still allow room for democracy, while communist countries are _____.

A

authoritarian

31
Q

Communist governments typically do not _____ individual freedom and impose strict regulations on their citizens

A

Allow

32
Q

Soviet Union

A

1917-1991

33
Q

Soviet planners were most _____ with building national power and prestige in the international community

A

Concerned

34
Q

_____ were large farms leased from the state to groups of peasant farmers

A

Collectives

35
Q

The Soviet government had _____ that the farmers had to meet

A

Quotas

36
Q

Soviet factories were also _____-_____

A

State-owned

37
Q

_____ _____ requires a large capital investment and that produces items for other industries

A

Heavy industry

38
Q

Jobs and wages were set by the _____

A

Government

39
Q

_____ was illegal in the Soviet Union.

A

Entrepreneurship

40
Q

_____ _____ states that government generally should not intervene in the marketplace

A

Laissez faire

41
Q

_____ _____ is property that is owned by individuals or companies, not by the government or people as a whole.

A

Private property

42
Q

_____ _____ is an economic system characterized by private or corporate ownership of capital goods

A

Free enterprise

43
Q

In order to make this transition, state firms must be _____

A

Privatized

Economics Midterm (7 decks)

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