Economics (H)

Chapter 2

Review Game

Economies Free Enterprise

Economic Goals

Consumers & Entrepreneurs

Role of Government

MISC

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A1

Economic system where the allocation of scarce

resources is determined by ritual, custom, and habit.

Traditional Economy

A2

Economic system in which a central authority makes

most of the economic decisions.

Command Economy

A3

Profits and Private Property are least associated with:

Command Economy

A4

Economic system in which people and firms act in their own best interests to answer

the economic questions.

Market Economy (Free Enterprise Economy)

A5

When competing against other types of economies, what is the

largest disadvantage for a Traditional Economy?

This type of economy discourages new ideas and new

ways of doing things.

A6

In the Inuit Tribe, what role did the successful hunter

have in the tribe?

He will share the spoils of his hunt to help with the

survival of the tribe.

A7

Concerning the economic question of WHAT, what

advantage does a Traditional Economy offer?

Everyone knows which role to play.

A8

Economic system in which decisions about how

resources should be used are made partly by the private sector and public sector.

Mixed Economy

A9

The economic system of the North Korea and Cuba are a form of:

Command Economy

A10

The United States is an example of:

Mixed Economy

B1

In a Market Economy, goods typically go to those who:

Have the willingness and ability to purchase them.

B2

In a Free Enterprise, why do individuals enter into

transactions?

Both the buyer and seller enter into a transaction only if both

are better off after the transaction.

B3

In a Market Economy, if a firm uses a combination of

inputs that does NOT minimize costs, then:

The firm will lose sales, and then go out of business.

B4

Capitalism is defined as an economic system which:

Individuals have ownership of all factors of production

B5

In a Market Economy, what is meant by

consumers “casting their vote”?

Consumers “vote” for products they like by purchasing those

products.

B6

One distinguishing feature between Capitalist countries

and NON-Capitalist countries is that:

Capitalist countries have private property rights and non-

capitalist countries do not.

B7

What would NOT be consistent with

Pure Capitalism?

Government involvement in economic decisions.

B8

B9

B10

C1

What is meant by Economic Freedom?

People have the right to choose occupation, employer,

products, prices, etc…

C2

What is meant by Economic Efficiency?

Due to scarcity, resources have to be used in the best

ways to maximize their benefits.

C3

What is meant by Full Employment?

People want their economic system to provide as many

jobs as possible.

C4

In a Free Enterprise, how does Competition benefit

consumers?

Through the struggle of among sellers, prices are

lower for consumers.

C5

A rise in the general level of prices.

INFLATION

C6

Federal program of disability and retirement benefits that covers most

working people.

Social Security

C7

Federal program that provides health insurance for persons 65 or older.

Medicare

C8

In order to combat Inflation, how does the

Federal Reserve Bank try to combat inflation?

Increase in IR, will decrease spending.

C9

What is meant by Economic Growth?

Growth is needed so people can have more goods and services.

C10

D1

What is the role of the Entrepreneur in a Free Enterprise Economy?

By being risk-takers, they bring in new products and

production methods.

D2

Bill Gates

Creator of Microsoft

D3

Ray Kroc

Developer of McDonalds

D4

Consumer Sovereignty

Consumers rule the economy “The Consumer is always right”

D5

How do consumers determine which products

will be produced?

Consumers cast “votes” on which products to produce

by purchasing them.

D6

Mary Kay Ash

Created a cosmetic company called Mary Kay Cosmetics

D7

John Johnson

Created a publishing company called Johnson Publishing

D8

Madame C.J. Walker

Created hair products, and became the first African-

American millionaire

D9

What do successful entrepreneurs attract?

Successful entrepreneurs attract more firms into the

market (profits)

D10

E1

What is meant by the government being a

“protector”? (examples)

The government protects citizens from false advertising, unsafe products, and environmental

hazards.

E2

Agency designed to protect consumers from unsafe food

and drugs.

Food & Drug Administration (FDA)

E3

What is meant by the government being a

“regulator”? (examples)

The government regulated market competition, interstate commerce, communications, banking, and the

stock market

E4

Agency to help set up laws and regulations to protect the

natural resources of the United States.

Environmental Protection Agency (EPA)

E5

How is the Federal Government considered a

“provider”?

The government “provides” for the National Defense,

Education, Public Welfare

E6

Agency that regulates the television and radio

industries.

Federal Communications Commission (FCC)

E7

How is the Federal Government considered a

“consumer”?

The government is the 2nd largest consuming unit.

Purchases all kinds of resources.

E8

Agency designed to regulate the stock and bond markets

in the United States.

Securities Exchange Commission (SEC)

E9

Agency designed to protect consumers from

false or misleading advertising.

Federal Trade Commission (FTC)

E10

Agency designed to regulate the nuclear

industry .

Nuclear Regulatory Commission (NRC)

F1

“The institutional means by which resources are used to satisfy human wants”

is the definition of:

Economic System

F2

When dealing with creativity, what DISADVANTAGE

does a Command Economy create?

There is no incentive for people to create new ideas,

products, or methods.

F3

Profits and Private Property are

most closely associated with:

Free Enterprise Economy

F4

What are the limits of someone’s

Private Property Rights in a Free Enterprise system?

Someone’s rights end when they interfere with the rights of

others.

F5

For consumers, what DISADVANTAGE does a

Command Economy create?

In order to meet the industrial demands, there will be a large cut back on consumer goods.

F6

F7

F8

F9

F10

Interpreting Maps

Interpreting Maps