Economic Systems

Question 1

what are the two basic types of economics?

Answer 1

Microeconomics, Macroeconomics

Question 2

____________ is the study of family/ individual businesses in the economy

Answer 2

Microeconomics

Question 3

__________ is the study of economics as the whole word or large scale

Answer 3

Macroeconomics

Question 4

___________ study of economic behavior

Answer 4

Positive Economics

Question 5

___________- has judgements on what economic behavior should be

Answer 5

Normative Economics

Question 6

What are the three economic questions?

Answer 6

who are we making it for?
how
why

Question 7

_________ the way society uses resources to satisfy wants

Answer 7

economics system

Question 8

what are the three main types of economic systems?

Answer 8

Traditional
Command
Market Economy

Question 9

__________ is an economy system in which families base decisions on customs passed down-survival is the goal

Answer 9

Traditional Economy

Question 10

___________ the government decides what goods and services will be produced

Answer 10

Command Economics

Question 11

_______________ is based on individual choice, consumer/producers drive economy

Answer 11

Market Economy

Question 12

Adam Smith wrote ______________ which in it he wrote about people’s self interest

Answer 12

the Wealth of Nations

Question 13

___________ is a system by which the government of the homeland controlled trade with its colonies

Answer 13

mercantilism

Question 14

an _____________ guids the marketplace

Answer 14

invisible hand

Question 15

Advantages for traditional economics

Answer 15

have clear answers
ensures survival
determined by custom
little disagreement over goals and roles

Question 16

disadvantages for traditional economics

Answer 16

based on customs
less productive
resistant to change
low standard of living

Question 17

a system in which society’s leaders make all economic decisions is called a _____________

Answer 17

centrally planned economy

Question 18

____________ is an economic system in which the government owns some or all of the factors of production

Answer 18

socialism

Question 19

____________ is an economic system in which the government owns all the factors of productions and there is almost no political freedom

Answer 19

communism

Question 20

______________ require absolute obedience to those in power

Answer 20

authoritarian system

Question 21

_____________ is established through democratic political process government owns industries but other industries are privately owned

Answer 21

democratic socialism

Question 22

_________ concluded that the industrial revolution had created a system of wage slavery

Answer 22

marx

Question 23

___________ assisted by ________ laid out ideas of workers overthrowing the communist manifesto

Answer 23

marx, engels

Question 24

__________’s economy is is a primarily a command economy

Answer 24

north korea

Question 25

advantages for command economies

Answer 25

provide for everyone

use nation’s resources to make money

Question 26

disadvantages of command economics

Answer 26

little understanding of local conditions
little motive to improve productivity
prices are cheap
shortages

Question 27

_______ is the rights of people to own businesses and resources; are necessary to make markets work right

Answer 27

private property rights*

Question 28

___________ is the place where people buy and sell goods and services

Answer 28

the market

Question 29

__________ is vital to any single scale

Answer 29

clear ownership

Question 30

__________ is an economic system that is based on private ownership of the factors of production

Answer 30

capitalism*

Question 31

the principal that the government should not interfere with the economy is called _____________

Answer 31

laissez fair*

Question 32

a _____________ is a trade in which both traders believe that what they are getting is better than what they are giving up- self interest guides

Answer 32

voluntary exchange

Question 33

__________ is considered a financial gain from a business transaction, a key feature of the market economy

Answer 33

profit

Question 34

______________ is the effort of two or more people to get the business of others by offering the best deal
incentives to come up with good ideas, leads to better quality product

Answer 34

competition

Question 35

____________ is the idea that because consumers are free to buy whatever they want and refuse products that they do not

Answer 35

consumer sovereignty

Question 36

___________ is the situation in which people concentrate their efforts in the areas which they have an advantage- leads to higher/lower priced products

Answer 36

specialization

Question 37

__________ is a tool that economics use to understand how market economies work - two economic decision makers households and businesses

Answer 37

circular flow model

Question 38

the market for goods and services is called the _______

Answer 38

product market

Question 39

the market for the factors of production is __________

Answer 39

factor market*

Question 40

__________ is the most common economy, has elements of all economic systems

Answer 40

mixed economy

Question 41

___________ means to change from private ownership to a government or public ownership

Answer 41

nationalize

Question 42

___________ means to change the government to public or private ownership

Answer 42

privatize