Unit 8 Test Flashcards
All resources and goods are what?
Limited
What are the types of resources
Natural human capital and entrepreneur
Why must individuals make a choice about desire goods and services?
Because these goods and services are limited
What is the price
The amount of money exchanged for a good or service
What determines price?
Interaction Between supply and demand
What does price determine?
Who acquires goods and services
What are incentives used for
To change economic behavior
Interaction of supply and demand determines what?
Price
What is demand?
The amount of a good or service that consumers are willing and able to buy
What is supply
The amount of a good or service that producers are willing and able to sell
What two things determine what is produced
Resources available and customer preferences
What do consumers preferences and price determine?
What is purchased and consumed
What are the three basic questions of economics
What Will be produced
who will produce it
For whom will it be produced?
What are the characteristics of all major economic system
No Country relies exclusively on markets to deal with scarcity
What is the United States economy
Primarily a free market economy but since some government is involved it is characterized as a mixed economy
When does government intervene in a market economy
When the benefits of government policy outweigh the costs
How do markets work in the USA
Markets are generally allowed to operate without undue interference of the government and prices are determined by supply and demand
How does private property work in the USA
Individuals and businesses have the right to own it Without undue interference from the government
How does profit work work in the USA
Profit consists of earnings after all expenses have been paid
How does competition work in the USA
Rivalry usually results in better quality goods and services at lower prices
How does consumer sovereignty work in the USA
Consumers determine what goods and services will be produced; Most decisions are made in the private sector government involvement is limited
