Chapter 3 Vocab

Question 1

The force that encourages people and organizations to improve their material well being

Answer 1

Profit motive

Question 2

The concept that everyone can compete in the marketplace

Answer 2

Open opportunity

Question 3

The concept of giving everyone the same legal rights

Answer 3

Legal equality

Question 4

The concept that people have the right and privilege to control their possessions as they wish

Answer 4

Private property rights

Question 5

The concept that people may decide what agreements they want to enter into

Answer 5

Free contract

Question 6

The concept that people may decide what and when they want to buy and sell

Answer 6

Voluntary exchange

Question 7

The rivalry among sellers to attract customers while lowering costs

Answer 7

Competition

Question 8

A private organization that tries to persuade public officials to act or vote according to group members interest

Answer 8

Interest group

Question 9

Laws requiring companies to provide fill information about their products

Answer 9

Public disclosure laws

Question 10

The concerns of the public as a whole

Answer 10

Public interest

Question 11

The study of the behavior and decision making of entire economics

Answer 11

Macroeconomics

Question 12

The study of the economic behavior and decision making of small units, such as individuals, families, and businesses

Answer 12

Microeconomics

Question 13

The total value of all final goods and services produced in a particular economy

Answer 13

Gross domestic product (GDP)

Question 14

A period of macroeconomic expansion followed by a period of contraction

Answer 14

Business cycle

Question 15

A commitment to the value of work and purposeful activity

Answer 15

Work ethic

Question 16

The process used to produce a good or service

Answer 16

Technology

Question 17

A shared good or service for which it would be impractical to make consumers pay individually and to exclude nonpayers

Answer 17

Public good

Question 18

The part of the economy that involves the transactions of the government

Answer 18

Public sector

Question 19

The part of the economy that involves the transactions of individuals and businesses

Answer 19

Private sector

Question 20

Someone who would not choose to pay for a certain good or service, but would get the benefits of it anyway if it were provided as a public good

Answer 20

Free rider

Question 21

A situation in which market does not distribute resources efficiently

Answer 21

Market failure

Question 22

An economic side effect of a good or service that generates benefits or costs to someone other than the person deciding how much to produce or consume

Answer 22

Externality

Question 23

An income level below that which is needed to support families or households

Answer 23

Poverty threshold

Question 24

Government aid to poor

Answer 24

Welfare

Question 25

Direct payments of money to eligible poor people

Answer 25

Cash transfers

Question 26

Goods and services provided for free or at greatly a reduced prices

Answer 26

I’m kind benefits