CHAPTER TWO REVIEW

1.An _________ is the method used by a society to produce & distribute goods and services. 2.In order for a society to decide the goods and services it’s going to produce it has to ask itself this question: __________________? 3._______________ is the income people receive for supplying factors of production such as land, labor, or capital

4.The person getting to drive the luxury car, the person owning only a Nokia phone with no camera or text messaging capabilities, or the person getting to live in the suburbs is answered by the question ______________________. 5.__________ is the love for one’s own country. 6.______________ is when a society maximizes what it can get for the resources they have to work with

7.A set of government programs to protect people in an unfavorable economic condition is called a ________. 8.___________ is the opportunity to make our own economic choices. 9.A level of economic prosperity is called ________________. 10.____________ is the way a society decides to divide the economic pie. 11.In a ___________ a society relies on custom or rituals to decide what to produce, how to produce it and whom to distribute it to.

12.In a ____________ the government decides how to answer the three economic questions. 13.In a __________ the government plays a limited role. 14.In _____________ changes in technology, increased efficiency of products and production of new goods and services improves people’s standard of living.

16.The fact that people do not like uncertainty and want reassurance that goods and services will be available is called ________________. 17.A farmer getting rid of his mule and using a tractor is an example of ______________. 18.A government breaking up a monopoly will most likely occur in a _______________.

20.Questions like “What constitutes a fair share or should everyone get the same is an example of ___________ 21.Food stamps, section 8 housing, & social security are examples of _____________. 22.A government that limits the amount of cell phones your company can produce each year is an example of a _____.

A ___________ is an arrangement that allows buyers and sellers to exchange things. Economic systems that are based on voluntary exchanges in markets are called ______________. In a _______________ individuals answer the Three Economic Questions. In a Free Market System individuals own the ____________________.

_____________ is the concentration of ones efforts on a limited number of goods and services. _______________ arranges for people specializing in a limited number of goods to connect with others specializing in other goods and services to meet their needs or wants.

______________ a person or group living in the same residence owns the factors of production, land labor, & capital. ____________ are organizations that uses resources to produce a product which it sells. In the ________________ Firms utilize your factors of production, to produce products or services which it sells to meet your needs or wants

The ______________ is, goods & services that firms produce and are purchased by households. _____________ being concerned about own personal gain, is a motivating force of the free market system. _____________ balances the self-interest of both by forcing two or more producers to fight for (compete) the dollars of consumers.

Labor & human capital Goods & services Factor payments Wages. Money flow Money flows back into the factory FACTOR MARKET PRODUCT MARKET

An ___________ is the fear of losing business and the hope of making a profit or reward. The desire to protect ones own interest and the fear of losing a profit becomes the _____________ that regulates the Free Market. ____________ was one of the first philosophers to offer an explanation of how a market economy works. ____________ is a French term which means “to leave alone,” or “Let them do as they please.”

Advantages of the Free Market –Economic Efficiency – Scarce resources gets maximized. –Economic Freedom- People make their own economic choices without interference from government. –Economic Growth & Innovation- innovations increase efficiency and our quality of life.

In a ___________ government answers the Three economic questions. A ___________ opposes Private property, Free market pricing, Competition, Consumer choice.

___________ is the belief that wealth should be evenly distributed throughout society. In ___________ all political and economic power rest in the hands of a central government.

In a Mixed Economy government provides services that an entrepreneur normally would not consider providing. –An Army –Welfare –Education for all. –Public services. –Police protection In a Mixed economy government helps to regulate the practices of businesses to protect the consumers.

In a Mixed Economy some needs that markets could meet fall to government so that all members of society can participate. In a Mixed economy government creates laws protecting property rights and patent laws giving people the incentive to develop new products. The government create laws to promote competition preventing monopolies.

In a Mixed Economy some economic goals are better met by government action. Mixed economies are characterized by Free enterprise – an economic system characterized by private or corporate ownership of capital goods. A Continuum is a range of economies with no clear divisions. –Government control can range from total control to very little control.