Econ 2

Front 1

Which of the following represents an institution or mechanism that brings buyers and sellers into contact

Back 1

A Market

Front 2

Which of the following are the key components of the market system

Back 2

Markets
Prices

Front 3

A _____ proprietorship is a business owned and managed by a single person.

Back 3

Sole

Front 4

When every economic unit in a society such as individuals, firms or government attempts to achieve their own particular goal usually requiring delivering something of value to others, this is referred to as:

Back 4

Self-Interest

Front 5

The goods and services produced by an economic unit through _____ can be exchanged for a full range of desired products produced by other economic units.

Back 5

Specialization

Front 6

What collectively direct or directs resources to industries that are meeting consumer wants and away from industries that are not meeting consumer wants?

Back 6

Dollar Votes
Consumer Sovereignty

Front 7

In a market system, private property refers to the right of private firms and individuals, not the _____, to own most property resources such as land and capital.

Back 7

government

Front 8

Which are components of the circular flow model?

Back 8

Households
Product Market
Businesses
Resource Market

Front 9

True or False: In a command system, the government decides how a country's resources will be best utilized.

Back 9

True

Front 10

An economic system intends to address _____ goods are to be produced, _____ they are to be produced, _____ gets what is produced, how to accomodate change and how to promote technological progress

Back 10

What, How, Who

Front 11

Three virtues of the market system include, _____, _____, and _____.

Back 11

Freedom, Efficiency, Incentives

Front 12

An active, but limited government is an example of which market system in modern advanced industrial economies?

Back 12

Free Market System

Front 13

Which are economic problems which were faced by the former Soviet Union, Eastern Europe, and China (prior to its market reforms)?

Back 13

Incentive Problem
Coordination Problem

Front 14

In a _____ owners bear no personal financial responsibility for the firm's debts and obligations

Back 14

Corporation

Front 15

Which is cited as a natural outgrowth of the sole proprietorship?

Back 15

Partnership

Front 16

Human specialization or division of labor contributes to a society's output in which of the following ways?

Back 16

Specialization saves time
Specialization fosters learning by doing.
Specialization makes use of differences in ability.

Front 17

Which does not occur in the resource market?

Back 17

Households produce goods.

Front 18

In the circular flow model:

Back 18

Households spend income in the product market

Front 19

Which summarizes the product market?

Back 19

Businesses determine whether a good or service should continue to be produced based on revenues received from sales

Consumer spending on goods and services yields sales revenues for businesses.

Good and services produced are bought and sold

Households use income recieved from the sale of resources to buy goods and services.

Front 20

True or False: Communism exhibits all the characteristics of a command system

Back 20

True

Front 21

The term "Laissez-Faire" means

Back 21

Keep the government from interfering in the economy

Front 22

Both land and labor would be bought and sold in the _____ market.

Back 22

Resource

Front 23

What describes the role of government in the United States' form of capitalism?

Back 23

Modifies the distribution of income

Provides certain goods and services that would otherwise be underproduced or not produced at all.

Provides the rules for economic activity

Promotes economic stability and growth.

Front 24

True or False: The lack of incentives contributed to the economic problems faced by the economies of the former Soviet Union, Eastern Europe, and China prior to the market reforms.

Back 24

True

Front 25

By moving up the hierarchy of the Communist party, individuals could obtain:

Back 25

Better access to health care

Better housing

The right to shop in special stores.

Front 26

_____ is the human specialization of some process.

Back 26

Division of Labor

Front 27

Private _____ rights, coupled with the freedom to negotiate binding legal _____ enables individuals and businesses to obtain, use and dispose of property resources as they see fit.

Back 27

Property

Contracts

Front 28

True or False: The resource market is the place where resources or the services of resource suppliers are produced.

Back 28

False

Front 29

Households obtain income in the _____ market in order to buy the goods and services that businesses produce in the _____ market.

Back 29

Resource

Product

Front 30

Specialization works best under what basis?

Back 30

Firm
International
Individual
Regional

Front 31

What ensures that entrepreneurs and private businesses are free to obtain and use economic resources to produce their choice of goods and services?

Back 31

Freedom of Enterprise

Front 32

In recent years the new MP3 and digital technologies have started to replace compact disks. This is an example of:

Back 32

Creative Destruction

Front 33

What are examples of markets?

Back 33

Sales of Automotibiles on eBay

Concert ticket sales

The Sales of textbooks at the college bookstore

Duty-free stores in airports

Front 34

Freedom of _____ enables owners to employ or dispose of their property and money as they see fit.

Back 34

Choice

Front 35

The Wealth of Nations was written by:

Back 35

Adam Smith

Front 36

What does competition require?

Back 36

Two or more buyers and two or more sellers acting independently in a particular product or resource market.

Freedom of sellers and buyers to enter or leave markets on the basis of their economic self-interest.

Front 37

The five questions that every society must address reflect the reality of _____ resources in a world of _____ wants.

Back 37

Scarce

Infinite

Front 38

Specializaton is about an individual or firm using available resources to:

Back 38

Produce one or only a few goods and services

Front 39

Money performs several functions, but first and foremost it is a:

Back 39

medium of exchange

Front 40

What have historically been used as mediums of exchange?

Back 40

Shells, stones, cattle, metals, cigarettes.

Front 41

In a market system, specialization requires exchange. Which of the following best describes the use of money in an exchange?

Back 41

Money facilitates exchange by ending the need for a coincidence of wants usually resulting from barter

Front 42

Private individuals and firms, not the government, own most of the property resources such as land and capital in a free _____ system.

Back 42

Market

Front 43

Intellectual property is an extension of property rights through:

Back 43

Patents, Copyrights, Trademarks

Front 44

Technological improvements or advancements also include new and improved methods that _____ distribution or production costs.

Back 44

reduce

Front 45

Capital accumulation refers to the accumulation of:

Back 45

Physical capital goods that yield even greater profit income in the future.

Physical capital goods that are require to advance technology.

Physical capital goods that are used to build consumer goods.

Front 46

True or False: A person's income depends on the quantities of property and human resource that the person supplies to the market.

Back 46

True

Front 47

What best describes the virtue of incentives?

Back 47

Assumption of risk by entrepreneurs to innovate and improve the general standard of living.

Hard work, skill aquisition, and innovation.

Greater work skills and effort mean greater production and higher incomes leading to higher standards of living.

Front 48

True of False: The coordinating mechanism of capitalism is a system of markets and prices.

Back 48

True

Front 49

Competition among _____ and _____ diffuses economic power within the economic units that make up the economy.

Back 49

Buyers

Sellers