Semester II Exam Review

46. Economics is the study of producers and consumers (9a).

47. Another term for the factors of production are the resources needed by a business to make a product (9a).

natural, capital , & labor 48. What are the three main resources used in the production of goods and services (9a)? natural, capital , & labor

49. The inability to satisfy all our wants at the same time is known as __scarcity__ (9a).

50. Resources and goods are limited; this forces consumers to pick from alternatives or make a choice (9a).

51. What is given up when a choice is made is known as the opportunity cost (9a).

52. The amount of money exchanged for a good or service is known as price (9a).

53. Something used by producers to incite, motivate, and change economic behavior is an incentive (9a).

54. The amount consumers are willing and able to buy at a certain price is known as demand (9a).

55. The amount producers are willing and able to sell at a certain price is known as supply (9a).

56. Combining resources to make a good or provide a service is known as production (9a).

57. Using goods and services is known as consumption (9a).

58. What are the three basic economic systems 58. What are the three basic economic systems? Free Market- Mixed- Command (9b).

59. In what type of economy do individuals, businesses, and the government make economic decisions (9b)? mixed

60. What is the most common economic system used today (9b)? mixed

61. In what type of economy does the central government own the property and resources, and make all the economic decisions (9b)? command

62. What type of economy does the United States have (9c)? mixed

63. Rivalry between producers and sellers of goods and services is known as competition (9c).

64. A business’ profit is earnings minus expenses (9c).

65. Buyers determine what is produced by the purchases they make 65. Buyers determine what is produced by the purchases they make. This is known as consumer sovereignty (9c).

66. What are the three basic types of business organizational structures (10a)? Corporation, Partnership, & Sole Proprietorship/Owner

67. What type of business organization has one owner who takes all the risks and makes all the profits (10a)? sole proprietorship

68. What type of business organization has two or more owners who share the risks and the profits (10a)? partnership

69. What type of business organization has any number of owners whose risk and profit is limited to their investment (10a)? corporation

70. A person willing to take a risk in order to make a profit is known as an entrepreneur (10a).

71. The circular flow of economic activity includes interactions between what three groups (10b)? businesses, government, & households

72. Who in the circular flow owns the resources and uses the income from the sale of the resources to purchase products (10b)? households

73. Who in the circular flow uses the profit from the sale of products to purchase more resources (10b)? businesses

74. Who in the circular flow collects taxes to provide public goods and services (10b)? government

75. What are the four basic types of financial institutions (10c) 75. What are the four basic types of financial institutions (10c)? banks, savings & loans, credit unions, & securities brokerages

76. The two main functions of financial institutions are to receive deposits and make loans (10c).

77. How do financial institutions encourage households to save and invest (10c)? by paying them interest on their deposits