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49 Cards in this Set
- Front
- Back
Which of the following represents an institution or mechanism that brings buyers and sellers into contact
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A Market
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Which of the following are the key components of the market system
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Markets
Prices |
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A _____ proprietorship is a business owned and managed by a single person.
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Sole
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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:
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Self-Interest
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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.
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Specialization
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What collectively direct or directs resources to industries that are meeting consumer wants and away from industries that are not meeting consumer wants?
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Dollar Votes
Consumer Sovereignty |
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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.
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government
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Which are components of the circular flow model?
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Households
Product Market Businesses Resource Market |
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True or False: In a command system, the government decides how a country's resources will be best utilized.
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True
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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
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What, How, Who
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Three virtues of the market system include, _____, _____, and _____.
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Freedom, Efficiency, Incentives
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An active, but limited government is an example of which market system in modern advanced industrial economies?
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Free Market System
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Which are economic problems which were faced by the former Soviet Union, Eastern Europe, and China (prior to its market reforms)?
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Incentive Problem
Coordination Problem |
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In a _____ owners bear no personal financial responsibility for the firm's debts and obligations
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Corporation
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Which is cited as a natural outgrowth of the sole proprietorship?
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Partnership
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Human specialization or division of labor contributes to a society's output in which of the following ways?
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Specialization saves time
Specialization fosters learning by doing. Specialization makes use of differences in ability. |
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Which does not occur in the resource market?
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Households produce goods.
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In the circular flow model:
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Households spend income in the product market
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Which summarizes the product market?
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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. |
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True or False: Communism exhibits all the characteristics of a command system
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True
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The term "Laissez-Faire" means
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Keep the government from interfering in the economy
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Both land and labor would be bought and sold in the _____ market.
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Resource
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What describes the role of government in the United States' form of capitalism?
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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. |
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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.
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True
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By moving up the hierarchy of the Communist party, individuals could obtain:
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Better access to health care
Better housing The right to shop in special stores. |
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_____ is the human specialization of some process.
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Division of Labor
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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.
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Property
Contracts |
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True or False: The resource market is the place where resources or the services of resource suppliers are produced.
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False
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Households obtain income in the _____ market in order to buy the goods and services that businesses produce in the _____ market.
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Resource
Product |
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Specialization works best under what basis?
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Firm
International Individual Regional |
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What ensures that entrepreneurs and private businesses are free to obtain and use economic resources to produce their choice of goods and services?
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Freedom of Enterprise
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In recent years the new MP3 and digital technologies have started to replace compact disks. This is an example of:
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Creative Destruction
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What are examples of markets?
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Sales of Automotibiles on eBay
Concert ticket sales The Sales of textbooks at the college bookstore Duty-free stores in airports |
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Freedom of _____ enables owners to employ or dispose of their property and money as they see fit.
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Choice
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The Wealth of Nations was written by:
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Adam Smith
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What does competition require?
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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. |
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The five questions that every society must address reflect the reality of _____ resources in a world of _____ wants.
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Scarce
Infinite |
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Specializaton is about an individual or firm using available resources to:
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Produce one or only a few goods and services
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Money performs several functions, but first and foremost it is a:
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medium of exchange
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What have historically been used as mediums of exchange?
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Shells, stones, cattle, metals, cigarettes.
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In a market system, specialization requires exchange. Which of the following best describes the use of money in an exchange?
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Money facilitates exchange by ending the need for a coincidence of wants usually resulting from barter
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Private individuals and firms, not the government, own most of the property resources such as land and capital in a free _____ system.
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Market
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Intellectual property is an extension of property rights through:
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Patents, Copyrights, Trademarks
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Technological improvements or advancements also include new and improved methods that _____ distribution or production costs.
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reduce
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Capital accumulation refers to the accumulation of:
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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. |
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True or False: A person's income depends on the quantities of property and human resource that the person supplies to the market.
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True
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What best describes the virtue of incentives?
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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. |
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True of False: The coordinating mechanism of capitalism is a system of markets and prices.
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True
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Competition among _____ and _____ diffuses economic power within the economic units that make up the economy.
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Buyers
Sellers |