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Terms in this set (42)
Government owns all property and all economic output
free trade encouraged
Government provides social services for all
Founded on free enterprise
Economy almost totally dominated by government
government intervenes in the economy to keep order and promote general welfare
Both North Korea and U.S.
private property protected by law
Almost all imports are banned; no production of foreign companies allowed
An Asian dictator, in return for political support, gave the nation's rubber plantations to his friends
government leaders in Moscow invested public money heavily in large steel mills in the 1930s because they thought that this would help the nation to industrialize
Officials at PepsiCo, knowing that cola is not inherently dark, think that some consumers would like to purchase a clear cola drink
A priest in Tokyo was arrested for giving homeless people rice imported from the United States. Trade restrictions make rice in Japan and South Korea very expensive to consumers
Chrysler Corporation developed the Jeep Grand Cherokee to compete with Ford Motor Company's Explorer
Production Possibilities Curve
-graph that shows all combinations of goods/services that can be produced from fixed amount of resources in a given period of time.
-2 kinds of PPC- Constant opportunity cost, Increasing opportunity cost
-point inside graph- inefficient
-point on line- maximum possibility
-point outside of graph- unattainable
Could be bonus question: When something is unattainable, what 2 things must you do in order to meet that goal?
get more resources or improve technology
Vanessa wants to make as much money as possible during her summer vacation. She receives the following offers of part-time employment.
1) Cashier at a convenience store at $7.50/hr, for 10 hrs./week
2) Sales clerk at a music store at $7.00/hr, for 10 hrs./week
3) Assistant teller at a bank at $6.75/hr, for 5 hrs./week
4) Filing clerk at a law office at $6.50/hr, for 5 hrs./week
Based on the information above, if Vanessa decided to work at the convenience store, the opportunity cost of her decision is:
The salesclerk is the next best thing, $70 a week
What does scarcity affect?
If a company uses all its resources to produce only pet food and pet toys, write a true statement about this company?
its at its maximum production possibility
An economist would probably agree that to make effective financial decisions, consumers should do what before making purchases?
Make economic decisions through free interaction while looking out for them and their family's best interests
iron ore, trees, and water are examples of
Business A decides to increase production of cars by buying new robots for the assembly line. This would be considered an investment in what type of resource?
In economics, the idea of making a "trade-off" is described as
giving up one thing in exchange for something else
the concept of economic scarcity refers mainly to decision about
A city decides to build a hospital in one of its vacant lots instead of a sports center or a shopping mall. The opportunity cost of building the hospital is
sports center or shopping mall
In economics why can't society provide all people with all the goods and services they desire?
Because of Scarcity- limited in resources; people do not and cannot have enough income, time, or other resources to satisfy their every desire
managers, technical trainers, and accountants are examples of a company's _______ resources
The term OPPORTUNITY COST is best described as something that
is the next best alternative that was given up to do the action that was chosen
What is a CAPITAL GOOD used in the production of bakery products?
oven or mixer
When an economic choice is made, an economist would most likely define the OPPORTUNITY COST as the cost of doing what?
The cost of choosing your first pick over your other options
What is an event MOST LIKELY to occur in a command economy?
Public ownership, centralized decision making by the government, economic planning, and allocation by command
Elon Musk, CEO of SpaceX, would be considered which of the factors of production?
In a command economy, decisions about what to produce are made by who?
What is an event MOST LIKELY to occur in a market economy?
Individuals (producers/consumers) own the factors of production and make economic decisions through free interaction while looking out for their own and their families' best interest
Write a statement that is true of a pure market economy?
Individuals make the decisions.
-government owns most of the land
-production decisions are made according to need
-prices are set by regulatory agencies
TNSTAAFL a pillar of free enterprise. What does this mean?
There's no such thing as a free lunch. Everything has a cost- nothing is free
The market economy model of production and distribution is based on which of following in the box below?
-all of the above
all of the above
How is the United States economy is best described?
mixed market economy
Create a statement that explains why market economies are used extensively throughout the world?
Market economies are used extensively throughout the world because individuals do not like to feel controlled by the government
Who is most often associated with the ideas and phrases in the box below?
-the wealth of nations
-the benefits of free exchange in markets
-the concept of self-interest
What are the three basic concepts all economic systems must address?
1. Who in the society decides who will receive good/ service (allocation of goods)
2. Who in the society decides what will be produced (how much it will cost, etc.)
3. Who in the society decides how it will be produced (where factory will be located, how much workers will get paid, etc.)
The ideas below most likely describe aspects of which type of economy?
-all community members are fishers or farmers
-all children grow up to do the same work as their parents
-all family members work for the benefit of the community
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