Economics Unit 1 Test Review
0.0(0)
Learn
Practice Test
Spaced Repetition
Match
FlashcardsCard Sorting
1/21
Earn XP
Description and Tags
Study Analytics
Name | Mastery | Learn | Test | Matching | Spaced |
|---|
No study sessions yet.
22 Terms
1
New cards
Why is Scarcity is a basic economic problem?
Resources are Limited
2
New cards
\
What are some of the negative consequences of choices in a free market economy?
What are some of the negative consequences of choices in a free market economy?
\
**Decisions produce cost**
**Decisions produce cost**
3
New cards
\
Who decides what to produce, how to produce, for whom to produce and how much to produce in a Free enterprise economy
Who decides what to produce, how to produce, for whom to produce and how much to produce in a Free enterprise economy
\
**Consumers and producers**
**Consumers and producers**
4
New cards
Who decides what to produce, how to produce, for whom to produce and how much to produce in a communist economy
government
5
New cards
Who decides what to produce, how to produce, for whom to produce and how much to produce in a socialist economy
\
**Government, consumers and producers**
**Government, consumers and producers**
6
New cards
Explain Government Rationing and why they use it.
\
**Government controls the distribution of goods due to and emergency when shortages affect things like military operations.**
**Government controls the distribution of goods due to and emergency when shortages affect things like military operations.**
7
New cards
\
What role does consumer demand play in a free market economy?
What role does consumer demand play in a free market economy?
\
**Consumer demands drive what products will be produced and what prices will be charged.**
**Consumer demands drive what products will be produced and what prices will be charged.**
8
New cards
\
Make a list of capital needed to start a tailoring or garment making business.
Make a list of capital needed to start a tailoring or garment making business.
\
**Sewing Machines, Cloth, Manufacturing Space, Thread, Patterns etc.…**
**Sewing Machines, Cloth, Manufacturing Space, Thread, Patterns etc.…**
9
New cards
\
What is the role of entrepreneurs in a free market economy?
What is the role of entrepreneurs in a free market economy?
\
**Entrepreneurs are a driving force in an economy. They create new business and buy resources.**
**Entrepreneurs are a driving force in an economy. They create new business and buy resources.**
10
New cards
\
Make a list of items that would be considered “Land” in the Factors of Production.
Make a list of items that would be considered “Land” in the Factors of Production.
**Land, resources like coal, iron, cotton, cattle or anything that comes from or supported by the earth,**
11
New cards
\
Explain what the opportunity cost may be when purchasing a new car.
Explain what the opportunity cost may be when purchasing a new car.
**Since the average monthly payment for a new car is now nearly $600, having an expensive monthly payment means that a decent cut of your paycheck can't go to other things like investing for retirement.**
\
\
\
\
12
New cards
\
What is distribution of goods and services
What is distribution of goods and services
\
**Distribution is** **the activity of both selling and delivering products and services from manufacturer to customer**.
**Distribution is** **the activity of both selling and delivering products and services from manufacturer to customer**.
13
New cards
What are the main differences between the U.S. free enterprise system the economy and China’s communist economy?
In a Free Enterprise economy, consumers have choices on many products that are produced based on demand and the Government has less control over these decisions. In a Communist economy, the government makes the decisions on what and how to produce products limiting choices for consumers.
14
New cards
List several positive aspects of competition in a free enterprise system.
\
\
\
**More Choices, lower prices, better quality, well-paying jobs, and entrepreneur opportunities.** \n
**More Choices, lower prices, better quality, well-paying jobs, and entrepreneur opportunities.** \n
15
New cards
Adam Smith-
**Scottish philosopher, widely considered as the “Father of Economics”. Smith defined economics and wrote the “The Wealth of Nations.” Invisible Hand of economics**
\
\
16
New cards
John Maynard Keynes-
\
**Keynesian economics argues that demand drives supply and that healthy economies spend or invest more than they save. To create jobs and boost consumer buying power during a recession, Keynes held that** __**governments should increase spending**__**, even if it means going into debt.**
**Keynesian economics argues that demand drives supply and that healthy economies spend or invest more than they save. To create jobs and boost consumer buying power during a recession, Keynes held that** __**governments should increase spending**__**, even if it means going into debt.**
17
New cards
Milton Friedman
\
**American economist Milton Friedman developed the doctrine as a theory of business ethics that states that “an entity's greatest responsibility lies in the satisfaction of the shareholders.” Therefore, the business should always endeavor to maximize its revenues to increase returns for the shareholders.**
**American economist Milton Friedman developed the doctrine as a theory of business ethics that states that “an entity's greatest responsibility lies in the satisfaction of the shareholders.” Therefore, the business should always endeavor to maximize its revenues to increase returns for the shareholders.**
18
New cards
Friedrich Hayek
**Hayek, an Austrian economist, is considered a major social theorist and political philosopher of the 20th century. His theory is what led him to the Nobel Prize in 1974. He was a Strong advocate of free market capitalism, Author of The Road to Serfdom, and a** __**strong believer in Laissez Faire**__ **Capitalism**
\
\
19
New cards
\
List the benefits of the free enterprise system.
List the benefits of the free enterprise system.
**More Choices, lower prices, better quality, well-paying jobs, and entrepreneur opportunities.**
20
New cards
\
What characteristics of the U.S. free enterprise system creates the incentive to work, save, and invest?
What characteristics of the U.S. free enterprise system creates the incentive to work, save, and invest?
**The opportunity to own private property, obtain wealth and create a better life.**
\
\
21
New cards
\
How has global economic interdependence hurt US workers?
How has global economic interdependence hurt US workers?
**Global interdependence, also known as Globalization, shifted manufacturing jobs to areas with cheaper labor. When that happened, American manufacturing jobs were cut and many people lost their jobs and were forced to find other work.**
\
\
22
New cards
Explain the role of Consumers and Producers in a Free Enterprise economy.
Consumers drive a Free Enterprise economy with their demand for specific, high quality products. Producers make high quality products in line with the demand of consumers. What consumer want, producers make. When shortages occur, the prices increase and where surpluses occur prices drop.