Flashcards on macro –
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The market system is an economic system that:
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Produces more consumer goods than capital goods
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Laissez-faire capitalism limits the government's economic functions to the following, except:
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Establishing a legal environment to enforce contracts among individuals
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One major element of the command system is:
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Central planning conducted by the government
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In a market system, self-interest is the motivating force that:
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Coordinates and creates consistency in the operations of various parts of the economy
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With specialization in a market economy, individual:
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Producers consume little or none of the products they produce
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Specialization is beneficial:
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At the individual, regional, and even international levels
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The use of money for exchange and trade:
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Fosters more specialization in production
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The market economy is regarded as "efficient" in that:
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It directs resources towards products that the society wants most
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In the circular flow diagram, households get their ability to pay for their consumption expenditures from the:
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Incomes they earn for their resources
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In a market system, the task of assessing and managing the business risk of a firm is taken on by the firm's:
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Entrepreneurs
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When economists describe "a market," they mean:
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A system that allows buyers and sellers to interact with one another
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When high-school and college graduates apply for jobs in the labor markets,
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Job applicants are the "sellers" while employers are the "buyers".
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The market demand schedule or curve for a product shows the relationship between how much of the product buyers are willing and able to buy and the:
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Product's price
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When economists speak of "demand" in a particular market, they refer to:
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The whole demand curve or schedule
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Other things being equal, the law of demand suggests that as:
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The price of iPads decreases, the quantity demanded will increase
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A higher price reduces the quantity demanded for a product because:
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Individuals can afford less of the product and will switch to substitutes
