Economic Concepts and Choices

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Traditional economy
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What involves making economic choices based on customs?
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command economy
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What involves having the government make most economic decisions?
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Market economy
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What is based mainly on individual choice?
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little disagreement over economic goals
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What is an advantage of traditional economy?
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Does not ensure maximum productivity
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What is a disadvantage of a traditional economy?
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Centrally- planned economy
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What is another term for command of property?
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Communism
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What allows no private ownership of a property?
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Karl Marx
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Who wrote an economic study called Capital?
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The economy attempts to provide for everyone
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What is an advantage of a command economy?
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North Korea
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What nation has a command economy?
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Laissez faire
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means \” leave\” things alone
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consumer sovereignty
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the idea that consumers are free to buy what they want
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product market
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market for goods and services
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factor market
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Market for factors of production
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profit
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financial gain from a business transaction
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specialization
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involves concentrating efforts in a certain area
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competition
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The foundation of Market economies
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Models
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Simplified representations of complex economic activities are called economic
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PPC is an acronym for
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PPC is an acronym for production possibilities curve
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When creating a PPC, economists assume that technology is fixed
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technology is fixed
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underutilization
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The condition in which economic resources are not being used to their full potential is called
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Any point outside the curve of a PPC represents a goal that is
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impossible to meet because resources are fixed

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