| A | B |
|---|
| Opportunity cost refers to the | things given up when a choice is made. |
| A command economy operates on the force of | what the government decides. |
| A country with a large agricultural base is usually ______ economically developed than one with a large manufacturing base. | less |
| An increase in demand, with no change in supply, will usually cause prices to ____. | rise |
| ______ resources are expensive and usually used over a period of several years. | capital |
| Continually rising prices are one sign of a ____economy. | unhealthy |
| If the supply of an item decreases, the price usually goes ____. | up |
| In market economies, most economic decisions are made by the _______. | consumer |
| On a graph of supply and demand, the market price is where | the supply line and the demand line intersect |
| The first step of the decision-making process is to | define the problme |
| Economics is the study of | how limited resources are used to satisfy unlimited wants and needs. |
| If you decide to get a full-time job after graduating from high school instead of going to college, the opportunity cost of the decision is | the loss of a college education. |
| After you take action on a choice in the decision-making process, it is important to review the decision because | changed circumstances may require a change in the decision, a different decision may need to be made and you might have made an error in defining the original problem. |
| If consumers want more of a good than the amount supplied, then the price will | increase |
| Capital resources include | buildings, money, and equipment |
| An economy in which an individual may own and run a private business to make a profit, with little government involvement with business is a | mixed economy |
| Private property, profit motive, and a free, competitive marketplace are characteristics of a | market economy. |
| The consumer price index shows | price levels for various products and services. |
| The unemployment rate is an indicator of a country’s economic situation because | people not earning an income reduce the flow of money in circulation, fewer goods and services are produced when there is high unemployment, a high unemployment rate can cause other people to lose their jobs. |
| Per capita GDP is a better measure of a nation’s economic development than total GDP because | it gives a better comparison between countries of different population sizes. |
| As the demand for a product increases, prices tend to | rise. |
| A less-developed country is least likely to have | a highly educated population |
| The increase in average prices for goods and services in a country. | inflation |
| Materials that come from the ground. | natural resources |
| A measure of the productive output of a country within its borders, including items produced with foreign resources. | Gross Domestic Product |
| The amount of a good or service that consumers are willing and able to purchase at a certain price. | demand |
| Exists when a few large companies control an industry. | oligopoly |
| Competition will usually_____ the economic situation and living conditions of a nation. | improve |
| The candy bar industry is an example of | monopolistic competiton |
| Occurs when there are many companies competing in the same industry with identical products. | pure competiton |
| The forces of supply and demand are the major influence on prices in | pure competition |
| many sellers with slightly different products | monopolistic competition |
| The major factors that affect the degree of competition are | number of companies, business costs, and product differences. |
| Exists when one seller controls the entire market for a product or service | monopoloy |
| General decline in prices throughout an economy. | deflation |
| All of the people in a nation who are capable of working and want to work. | labor force |
| Percentage of the civilian labor force that is unemployed. | unemployment rate |
| Measure of a worker’s production in a specific amount of time. | productivity |
| Focusing on the production of specific goods so that more products can be produced with the same amount of labor. | specialization |
| Alternating periods of expansion and contraction in the economy. | business cycle |
| Period when the economy is growing and the GDP is at the highest point. Everyone that wants to be working is working, interest rates are high. | prosperity |
| Period of significant decline in total output, income, employment, and trade in an economy. | recession |
| Period of economic recession that is severe and lasts a long time. | depression |
| When a lower price is the main reason for customers to buy from one business over another. | price competition |
| Competitive advantage based on factors other than price such as color, quality, service. | non price competition |
| Activities involved in buying and selling goods on a large scale. | commerce |
| Tax and spending decisions made by the president and Congress. | fiscal policy |
| Policy that regulates the supply of money and interest rates by a central bank in an economy | monetary policy |
| Central bank of the United States that is responsible for the country’s monetary system. | Federal Reserve System |
| Total money circulating at any one time in a country. | money supply |
| US laws that promote fair trade and competition among businesses | antitrust laws |
| Matching limited resources to unlimited wants and needs. | the basic economic problem |
| The result of unlimited wanted but limited resources. | scarcity |
| What are the three economic questions that every society must answer? | What to produce? How to produce? For whom to produce? |
| Economic system that relies on habit, custom, or ritual to decide questions of production and consumption of goods and services. | traditional |
| Economic system in which a central authority is in command of the economy; a centrally planned economy | command |
| Means to "let them do as they please;" individuals left alone to try to better themselves will produce a multiplication of riches: more jobs and more goods and services; the doctrine that states that government generally should not intervene in the marketplace. | Laissez-faire |
| Phase of a business cycle in which unemployment begins to decrease,demand for goods and services increase, and GDP begins to rise again | recovery |
