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22 Cards in this Set
- Front
- Back
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The private ownership of property resources and use of markets and prices to direct and coordinate economic activity is what? |
Market economy
Pg. 30-32 |
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Main characteristic of the market system |
The right to own private property
Pg. 30-31 |
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In the market system, freedom of enterprise means |
Business are free to produce products that consumers want
Pg. 30-31 |
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Entrepreneurs tend to be people who... |
look at the maximization of profit in their economic decision making
Pg. 31-32 |
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How do consumers typically express self interest? |
By seeking the lowest price for a product
Pg. 31 |
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What is a characteristic of competition as economists see it? |
The widespread diffusion of economic power
Pg. 32 |
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What decides how to use scarce resources to satisfy economic wants?
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Prices
Pg. 32 |
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Communicating and coordinating economic decisions is a method of what? |
The market system
Pg. 32 |
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When workers specialize in various tasks to produce a commodity it is called what? |
A division of labor
Pg. 33 |
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What ways does human specialization contribute to an economy's output? |
It fosters learning by doing
Pg. 33 |
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Having a convenient means of exchanging goods is what? |
A prerequisite of specialization
Pg. 33 |
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In the market system, the role of government is |
Limited
Pg. 34 |
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What would result from a decrease in consumer demand for a product? |
A decrease in the profits of firms in the industry
Pg. 35 |
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The demand for resource is |
Derived from the demand for the products made with the resources
Pg. 35 |
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What is the primary factor in determining the share of the total output of the economy received by a household? |
The prices at which the household sells it resources
Pg. 36-37 |
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An increase in the demand for a product and a rise in its price cause an increase in the quantity supplied when
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Price is successfully performing its guiding function
Pg. 37 |
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In the market system, if one firm introduces a new and better method of production that enhances the firms economic profits, other firms will be forced to adopt the new method to... |
Avoid economic losses or bankruptcy
Pg. 37 |
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The creation of new products and production methods that destroy older existing products and older ways of doing business is called what? (Example: personal computers and type-writers)
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Creative destruction
Pg. 37 |
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The chief economic virtue of the competitive market system is that.. |
Promotes the efficient use of resources
Pg. 38 |
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In the system of central planning, the outputs of some industries became the inputs for other industries, but a failure of one industry to meet it production target would cause... |
A chain reaction of production problems
Pg. 38-39 |
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The two kinds of markets found in the circular flow model are... |
Product and resource markets
Pg. 40-41 |
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In the circular flow model, businesses... |
Sell products and buy resources
Pg. 40-41 |
