Econ test #1

What type of economy has elements of both capitalism and socialism?

mixed economy

___ is the belief that all value in produced goods is derived from labor.

Labor Theory of Value

The difference between the total value of production and wages paid to workers is called .

surplus value

___ is all the natural resources found in nature.

land

The physical and mental talents people contribute to the production of goods/ services is called _.

labor

____ is the sense of how the world works.

vision

An economic unit of one or more people that sells resources and buys goods/services is called .

household

An adverse side effect felt by other is a __.

negative externality

A person who receives a benefit without paying for it is called a _.

free-rider

A beneficial side effect felt by others is a _.

positive externality

The way in which society decides the 3 economic questions is it's .

economic system

__ means being able to be felt of touched.

tangible

, the government controls and may own many of the resources.

socialism

In , individuals own most of the resources and control their use.

free enterprise

The quality of bringing satisfaction or happiness is .

utility

_ are produced goods that are used as resources for further production.

capital goods

Anything that satisfies a person's wants and brings satisfaction is a .

good

When agents in one part of the world are affected by events elsewhere in the world.

globalization

Work done for a company by people from another country is .

offshoring

What are the 4 factors of production?

land, labor, capital, entrepreneurship

are tasks that people pay others to preform for them.

services

In economics, _ means "additional."

marginal

___ deals with choices as they relate to small units.

microeconomics

Study of the choices people make when trying to satisfy unlimited wants with limited resources.

economics

Anything that is used to produce good/services is a ___.

resource

The most highly valued alternative given up when a choices that relate to an entire economy.

opportunity cost

A _ is an explanation of how something works.

theory

___ deals with choices that relate to an entire economy.

macroeconomics

A _ is something we desire to have.

want

Total revenue minus total cost is .

profit

are the principles of conduct such as right and wrong or good and bad.

ethics

A good where one person's consumption doesn't take away from another's consumption is a .

public good

An is something that encourages or motivates a person to take action.

incentive

A person who takes advantage of new business opportunities is an _.

entrepreneur

occurs when wants are greater than the resources available to satisfy.

scarcity

public goods that people can physically be prohibited from using are _.

excludable public goods

When total cost exceeds total revenue, you have ___.

loss

Any good owned by a business or an individual is a _.

private property

Public goods that people can't be physically prohibited from using are ___.

non-excludable public goods

A good where one person's consumption takes away from another person's consumption is _.

private good

is any good owned by the government.

public property

What are the 3 basic economic questions?

What goods will be produced?

How will the goods be produced?

For whom will the goods be produced?

What are 5 features of free enterprise?

1. private property

2. choice

3. voluntary exchange

4. competition

5. economic incentives

What are the 3 ways the government can deal with a negative externality?

1. through the court system

2. regulation

3. taxation