Chapter 3 Review

Question 1

What are the four factors of production?

Answer 1

natural resources, labor, capital, entrepreneurship

Question 2

What term refers to someone who owns producer goods or who owns a share of a business that produces goods?

Answer 2

capitalist

Question 3

What term refers to an individual who risks his time and resources in the attempt to establish an economic enterprise?

Answer 3

entrepreneur

Question 4

Since the Soviet government controlled much of the available resources, the “capitalism” found in the former Soviet Union would be called ___ capitalism.

Answer 4

state

Question 5

What are the three basic components of capitalism?

Answer 5

property rights, freedom of enterprise and competition in a market environment, and unlimited government

Question 6

As seen in a circular flow model of a free enterprise economy, what are the market’s two components

Answer 6

resource market and the product market

Question 7

A ___ economy is an economic system that provides barely enough to keep a society alive

Answer 7

subsistence

Question 8

Name an energy source that does not generate greenhouse gases but has the disadvantage of significant waste disposal issues

Answer 8

nuclear power

Question 9

productivity

Answer 9

a measure of how efficiently resources are employed by the company.