Economics Chapter 2 Worksheets – Flashcards
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In which economy do communities generally have a low standard of living?
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traditional economy
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How a society answers the key economic questions primarily depends on...
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a society's goals and values
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All of the following are key economic questions that every society must answer, EXCEPT:
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Where should goods and services be produced?
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The income people receive for supplying factors of production, such as land, labor, or capital, are
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factor payments
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A centrally planned economy is
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an economic system in which the government makes all the decisions about production and consumption of goods and services
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Government programs the protect people experiencing unfavorable economic conditions are
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a safety net
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A mixed economy is
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a market-based, economic system based on free enterprise with some government involvement
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The method used by a society to produce and distribute goods and services is
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an economic system
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In a centrally planned economy, the three key economic questions are answered by the
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central government alone
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What has been mostly responsible for advancing from the agricultural age to the industrial age?
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innovation
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According to Adam Smith, what are the two factors that regulate a market place?
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competition and self-interest
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A household is a person or a group of people who live in the same residence. In economics households are also
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consumers of goods and services
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Consumer sovereignty is
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the powers of consumers to decide what gets produced
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The struggle among producers for consumer dollars is
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competition
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Why do markets exist?
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because people are not self-sufficient and need goods and services produced by others
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The invisible hand is
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a term economists use to describe the self-regulating nature of the market place
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Something, such as a reward or bonus, that encourages people to behave in a certain way could be called
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an incentive
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In the study of economics, the definition of a market is
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an arrangement that allows buyers and sellers to exchange things
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Which of the following is an example of competition in the marketplace?
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A small town has only two grocery stores, which are located one block away from each other
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What is the purpose of a firm?
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to produce goods and services
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What is one benefit of a centrally planned economy ?
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it provides a jumpstart to some industries
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Who answers the key economic questions in a centrally planned economy?
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government
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Which of the following was NOT a priority of Soviet planners?
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providing a variety of luxury items for all consumers
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What is a major disadvantage of a centrally planned economy?
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It cannot meet consumers' needs and wants
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Who owns the land and the capital in a centrally planned economy?
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government
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Authoritarian means
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requiring strict obedience to an authority, such as a dictator
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A social and political philosophy based on the belief that democratic means should be used to evenly distribute wealth throughout a society is
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socialism
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Communism is a(n)
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political system characterized by a centrally planned economy with all economic and political power resting in the hands of the central government
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Industry that requires a large capital investment and that produces items used in other industries is known as
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heavy industry
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In the Soviet Union, a collective was a
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large farm leased from the state to groups of peasant farmers
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Which of the following countries is in transition from a centrally planned economy to a market-based system?
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China
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Which of the following goods is provided by the U.S. government rather than by individuals?
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roads
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To sell state-run firms to individuals is to
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privatize
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With "centrally planned" on the left and "free market" on the right, which of the following countries' economic systems would be farthest to the right on the Continuum of Mixed Economies?
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Hong Kong
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Property owned by individuals or companies, not by the government or the people, as a whole is
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private property
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An economic system characterized by private or corporate ownership of capital goods; Investments that are determined by private decision rather than by state control; and determined in a free market is
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free enterprise
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Which of the following is NOT a main priority of the U.S. government?
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subsidizing businesses to keep product prices low
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Laissez faire is
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the doctrine that states that government generally should not intervene in the marketplace
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Why do governments fulfill some of society's needs, such as education, health care, and mass transit?
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so that all members of the society can participate
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A Continuum is a
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range with no clear divisions
