| A | B |
|---|
| What problem faces all economics systems? | scarce resources |
| What are the factors of production? | natural resources, labor, and capital |
| What type of economic system promotes economic growth? | market system |
| Who makes the economic decisions in a command economy? | government |
| What is the power of the consumer in the market? | consumer soveriegnty |
| Adam Smith's idea that the profit motive together with competition, would result in society having quality goods and services at a fair price and in the right quantity is known as: | the invisible hand |
| What type of business has the disadvantage of owner's liability? | sole proprietorship |
| What is a share of a company's profits called? | dividends |
| What law states that buyers will buy more at lower prices than at higher prices? | law of demand |
| The demand curve slopes in which direction? | downward |
| Which way does the demand curve shift when demand increases? | right |
| When demand for a product does not change because of a price increase is it inelastic or elastic? | inelastic |
| What law is the willingness and ability of producers to supply the market? | Law of supply |
| Which way would the supply curve shift if business taxes were decreased? | right |
| This is when there is only a few businesses in the market? | oligopoly |
| What backs the U.S. dollar today? | faith |
| What is the total dollar amount of goods and services produced in a given year? | GDP |
| A general rise in prices | inflation |
| During times of inflation what do people lose when going shopping for goods? | purchasing power |
| What is form of tight monetary policy? | raising the discount rate |
| In what direction does the supply curve go? | upward |
| What is a graph that shows an alternative way to use an economies productive resources? | production possibilities curve |
| What economic principle states that as production shifts from making one good or service to another, more and more resources are needed to increase production of the second good or service? | law of increasing costs |
| What is a decision making process in which you compare what you will sacrifice and gain by a specific action? | cost/benefit analysis |
| What is the act of giving up one benefit in order to gain another, great benefit called? | trade off |
| What is the most desirable alternative given up as the result of a decision called? | opportunity cost |
| What type of economy does the U.S. have? | mixed |
| What type of economies did China and the Soviet Union at one time have? | command |
| What type of economy discourages growth and inventions? | command |
| What is the right of the government to use private land for the public? | eminent domain |
| What is someone who benefits from a good they did not purchase? | positive externality |
| What causes a part of a good or service to be paid for by someone other than the producer? | negative externality |
| In a limited partnership who runs the business? | general partner |
| What is a good that is the second choice of the consumer for various reasons? | inferior goods |
| What is the amount that a producer is willing to put in the market? | quantity supplied |
