Test1

Question 1

What is economics

Answer 1

A social science that is concerned with the way that society chooses to use it’d scarce resources assuming that these resources have alternate uses for both present and future consumption

Question 2

What did Adam Smith believe

Answer 2

Is the people who will own and control a majority of the nations resources

Question 3

What kind of economist is Adam Smith?

Answer 3

A classical economist

Question 4

What is the invisible hand theory

Answer 4

ADAM SMITH—->WEALTH OF NATIONS

NO government role in the economy invisible hand will guide the economy in the way it should go

Question 5

What did Keynes believe?

Answer 5

Government should own and control resources
GOVERNMENT PROVIDES BASIC NEEDS
Won’t last for a long time

Question 6

Milton Friedman

Answer 6

Classical economist made Adam Smith’s ideas more modern

Question 7

Macroeconomics

Answer 7

Positive problem solver—->gather all facts and get solution based ONLY on these facts

Question 8

Microeconomics

Answer 8

Normative problem solver—-> gather all the facts and get solution beyond them like considering feelings

Question 9

What is a theory

Answer 9

An expressed relationship regarding variables

Question 10

What are the three parts to a theory?

Answer 10

DEFINITION 
GIVEN(conditions under which the theory is true)
HYPOTHESIS(best guess as to the relationship that exist among variables)

Question 11

What is the degree/amount of collectivism?

The amount of control the government has over its resources

Answer 11

Communist= leaders will keep the nation communist b/c they are living so well
Socialist= leaders will have a lot of control over resources to provide for common good
Capitalist= leaders have a little bit of collectivism for safety

Question 12

How will the resources be used?

Producing capital products and/or consumer products

Answer 12

Communist= use a majority of their capital to produce weapons
Socialist= to produce consumer products
Mixed(UNITED STATES)= produce both capital and consumer products

Question 13

Who will receive the product?

Who will buy/consume it

Answer 13

Communist= those in power
Socialist= everyone
Capitalist= those who can afford it

Question 14

What is the purpose of capital product?

Answer 14

To produce something else

Ex: money, tools, pencils

Question 15

What are the 4 factors of production?

Answer 15

LAND
CAPITAL
LABOR
ENTREPRENEURSHIP

Question 16

What is land

Answer 16

All property resources that ARE NOT MANMADE

Question 17

What is capital

Answer 17

MANMADE property resources

Question 18

What is labor

Answer 18

Physical work

Question 19

What is entrepreneurship?

Answer 19

Willingness to take a risk. Creativity and imagination.

Question 20

What nations have all 4 factors of production?

Answer 20

ALL NATIONS HAVE THE FACTORS OF PRODUCTION

Question 21

What is meant by the 4 facilitating factors?

Answer 21

A nation will be able to produce more quantitatively and qualitatively

Question 22

What are the 4 facilitating factors?

Ps. You can only find all 4 in a CAPITALIST NATION

Answer 22

1. Emphasis on Advanced technology
2. Specialization
3. STABLE medium of exchange
4. A culture that is willing to accept change

Question 23

Emphasis on advanced technology explanation

Answer 23

Technology is highly valued because it makes our lives easier and we get more from what we already have

Question 24

What is specialization?

Answer 24

Nation will use their best advantage as in…
ABSOLUTE advantage- better at producing a product than any other nation
COMPARATIVE advantage- good at producing product but there are other nations just as good

Question 25

What is a stable medium of exchange?

Answer 25

People have faith in their currency and are willing to work for the money

Question 26

Why would a culture be willing to accept change?

Answer 26

If they see the need to improve production. Like computers and women in the work place

Question 27

What are the 4 principles of capitalism?

Answer 27

1. Voluntary Investment 2. Profit Motive 3. Private Property 4. Limited government intervention

Question 28

What is voluntary investment?

Answer 28

The people of the nation who provide the business with the money that they need to operate. Therefore when the company is deciding what products to produce, they will do so to please the people

Question 29

What is profit motive?

Answer 29

The invisible hand. We buy things simply because we want or need them

Question 30

What is private property?

Answer 30

Talents and abilities are protected by law; they are our private property

Question 31

What is product?

Answer 31

``` Anything that is useful to someone GOODS- tangible SERVICES- intangible FREE- people are not willing to pay ECONOMIC- scarce and willing to pay ```

Question 32

What does utility mean?

Answer 32

useful FORM- offered in a form in which it is useful TIME- offered at a time in which it it useful PLACE- offered at a place in which it is useful SERVICES- offering a service appropriate to people's needs

Question 33

What is wealth?

Answer 33

Must be transferable, must have utility and must be tangible

Question 34

What are the 3 types of wealth?

Answer 34

``` Land ( must be transferable) Capital goods ( used to produce something else ) Consumer goods ( must be tangible ) ```

Question 35

What is money

Answer 35

A medium of exchange with a measure of value and stores value over time

Question 36

What is value

Answer 36

Has a dramatic affect on decision making. Intrinsic- personal value Extrinsic- price tag value

Question 37

What is liquidation?

Answer 37

When you convert wealth into money

Question 38

What are production possibilities?

Answer 38

All possible ways that a nation can use its resources

Question 39

What is opportunity cost?

Answer 39

Intrinsic value of an alternative that you give up in order to choose another opportunity THE GOOD THING YOU GIVE UP