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Economics > Study for Test 1 > Flashcards

Study for Test 1 Flashcards

1
Q

wrote Wealth of Nations

A

Adam Smith

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2
Q

used his resources wisely to make gunpowder for President Jefferson

A

E. I. du Pont

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3
Q

type of economy that is directed by customs and habits

A

traditional

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4
Q

type of economy that is directed by the government

A

command

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5
Q

type of economy is directed by an invisible hand

A

free market

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6
Q

type of economy that a Communist-controlled country would have

A

Command

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7
Q

type of good that forklift that is used to transport imported goods within a warehouse

A

capital good

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8
Q

type of good that a computer used for personl home use is

A

consumer good

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9
Q

term that refers to a person who owns a share of some business that produces goods

A

capitalist

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10
Q

person who risks his investment of time and money in the management of an economic enterprise

A

entrepreneur

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11
Q

diligent work directed by intelligence developed under the conditions of freedom is the true source of ________

A

prosperity

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12
Q

all people are said to be producers, or people who use goods

A

false
consumers

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13
Q

a mixed economy provides hardly enough to keep society alive

A

false
subsistence

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14
Q

state capitalism is a system in which the government controls most of the capitalism

A

true

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15
Q

when a country finds ways to produce more goods from existing resources, the prosperity of the national economy increases

A

true

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16
Q

the prosperity and efficiency of the free market economy is owed to its foundation of limited government, freedom of enterprise and competition, national resources and …

A

property rights

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17
Q

the two entities that make the majority of the economic decisions in the free market are private households and private businesses

A

TRUE

18
Q

Adam Smith stressed the importance of separating work into individual tasks known as

A

division of labor

19
Q

difference in the value of good s that a country sells abroad compared to those is purchases from other countries is

A

TRADE balance

20
Q

according to economists, the factors of production are scarce

A

TRUE

21
Q

study of specific components within a major economy

A

microeconomics

22
Q

establishment of colonies to benefit a mother country

A

imperialism

23
Q

mechanism through which people exchange goods

A

market

24
Q

intangible item for which people will pay

A

service

25
Q

economics system aimed to accumulate stock piles of gold and silver

A

mercantilism

26
Q

study of national economics

A

macroeconomics

27
Q

material items which people will pay for

A

goods

28
Q

quantity of a good for sale a certain price under certain conditions

A

supply

29
Q

seeks to show the relationships among the various components of an economy

A

economic model

30
Q

amount of a good bought at a certain price under certain circumstances

A

demand

31
Q

word that consumers attach to a good

A

value

32
Q

let things alone

A

laissez faire

33
Q

French group of 18th century economists who believed the market should be guided by rule of nature

A

physiocrats

34
Q

founder of Austrian school of economics

A

carl menger

35
Q

taxes that the government applies to imported good

A

tariffs

36
Q

economics is the study of choices that individuals and societies make concerning the __________, ___________, and __________ of goods

A

production
distribution
consumption

37
Q

value associated with any goods are directly related to

A

scarcity
utility

38
Q

four factors of production

A

capital
natural resources
labor
entrepreneurship

39
Q

5th factor of production

A

information

40
Q

Explain how the free market principles found in Adam Smith’s work have helped to shape American history…

A
  1. Smith was strong advocate of free market and division of labor
  2. Founding Fathers applied Smith’s principles to the new country, giving the nation a foundation of freedom
  3. for over 200 years, Americans have had freedom to buy and sell as they please
  4. Therefore, they had opportunity and motivation to produce goods as efficiently as possible
  5. the Result– the US has become one of the most prosperous and powerful countries in the world.
41
Q

Why did the pilgrims original economic plan fail, and what did they change, and why did this change help them succeed?

A
  1. the pilgrims’ original economic system failed bc it did not provide incentive to work to produce goods
  2. Individuals were treated the same whether they worked or not, making little reason to work
  3. Production was so low that pilgrims decided to allow private property and give people freedom to work for themselves
  4. the colony began prospering bc each individual was working to produce their own goods for in order to become prosperous.

Economics (13 decks)

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