chapter 5

Question 1

refers to the means through which sellers and buyers exchange goods

Answer 1

market

Question 2

signed that are used by consumers and producers to determine how much of a good to buy or sell at a given price and time

Answer 2

market signals

Question 2

goods that have a life expectancy of less than three years

Answer 2

nondurable goods

Question 3

goods which are expected to last at least three years

Answer 3

durable goods

Question 4

who determines what goods are to be produced and in what quantity

Answer 4

the consumer

Question 5

economic system in which the choices of individuals are limited by customs

Answer 5

traditional economy

Question 6

economic system ruled by a centralized government

Answer 6

command economy

Question 7

economic system in which consumers determine what is supplied and how much is produced

Answer 7

free economy

Question 8

total value of a business minus any liabilities

Answer 8

profit

Question 9

part of an economy that i controlled by private individuals, businesses, and organizations

Answer 9

private sector

Question 10

part of an economy which is controlled by national, state, and local governments

Answer 10

public sectors

Question 11

the diminishing of the value of a good that is caused by wear and time

Answer 11

depreciation

Question 12

the value of the best alternative that is given up when a different alternative is taken

Answer 12

opportunity cost

Question 13

one expense that some small-business owners fail to take into account

Answer 13

wage of management

Question 14

the total value of a business minus any liabilities

Answer 14

equity

Question 15

the desire to work to improve one’s economic situation

Answer 15

profit motive

Question 16

illegal systems for exchanging goods to avoid governmental regulations

Answer 16

black markets