ECONOMICS AND MARKETING CH3

produces more goods and services within its borders in a 12-month period.

The United States has the largest Gross Domestic Product in the world because it ___

14th

The ____ Amendment to the U.S. Constitution protects private property rights of the American people from state governments.

exchange

The act of buyers and sellers freely and willingly engaging in market transactions is known as voluntary ____

employment of workers

The broad social and economic goal of full employment primarily supports the full ____

votes or ballots

The dollars that consumers spend in the marketplace are like ___ for the products they like best. This is what gives consumers power in the marketplace.

centralized planning becomes too difficult if too many goods are produced.

A free market economy provides more choices for consumers than does a command economy because ____

- protect consumers from unsafe products like faulty automobile ignition switches. - require all employees to be treated equally.

A number of government regulations restrict the activities of business. They include laws that ___, ___

- Free markets - Competition between buyers and sellers - Private ownership of resources

A true free enterprise economy has which characteristics?

profit

An entrepreneur is a person who organizes the land, capital, and labor factors of production in order to seek the reward called ___

- some existing economic and social goals will change. - new economic and social goals will emerge.

As our society evolves over time, it is entirely possible that ____, ____

it is too difficult to amend major plans on a day-to-day basis.

Command economies are more resistant to change because ____

- benefits both producers and consumers. - helps move inefficient producers into different lines of production. - helps to assure that scarce resources are used as efficiently as possible.

Competition is something that ____

- own property. - enter into contracts. - sue and be sued.

Corporations have certain rights, which include the ability to ___, ___, ___

prolonged rise in the general level of prices.

During a period of inflation, economists would expect a ___

free enterprise

If an economy has both capitalism and free markets, the economy is based on ___

economic equity

If people say they believe in equal pay for equal work, they probably support the goal of ___

protector

If the government is involved in guarding consumers against unsafe food and drugs, it is fulfilling its role as ____

consumers and producers conduct economic affairs freely while subject to some government intervention.

In a mixed or modified free enterprise economy, ____

- are unique to free enterprise capitalism due to consumers' power at the ballot box. - make "free enterprise" slightly less free than the term suggests.

Laws that protect consumers from unsafe products like faulty airbags ___, ___

growth

One disadvantage of capitalism is that it occasionally suffers from uneven economic ___

efficiency

One of our broad economic and social goals is economic ____, or the need to use our scarce factors of production wisely.

- consumer purchases. - job location. - employer. - occupation.

Our economic freedoms include the choices we can make regarding our

fixed

Price stability is important to people who live on a ____ income, or an income that does not increase over time even though prices do.

benefits

Resolving conflicts among goals requires rational decision making that involves comparing costs of the action (including opportunity costs) to the ___

there will always be a need for some degree of government in the economy.

Some things like a system of national defense or a system of laws and justice cannot be provided by the private sector alone. This means that ____

reduce competition

The fact that the Carnival Corporation owns Carnival Cruise Lines, Holland America, Princes Cruises, Seaborne in North America, and Costa Cruises in southern Europe is just one example of how capitalism's large supply-side tendencies _____

private property rights

The feature that allows people to own and control their possessions as they wish in a system of private enterprise capitalism is known as ___

regulator

The government's role as a ______ involves preserving competition in the marketplace.

- enforcing laws against false and misleading advertising. - protecting consumers against unsafe food and drugs. - enforcing laws against environmental hazards and unsafe automobiles.

The government's role as protector in the U.S. economy includes ___, ___, ___

all levels of government now spend more than all private businesses combined.

The government's roles as protector, provider, and regulator have grown as the economy has expanded. Consequently, ____

- the tasks of protecting, providing, and regulating are expensive. - the American people want its government to engage in the tasks of protecting, providing, and regulating.

The growth of government spending in its role as a consumer has come about because ____, ____

the profit motive

The incentive to improve one's material well-being is driven by ______, one of the main characteristics of a free enterprise system.

- promotes progress. - promotes innovation.

The intense competition among firms in a free enterprise economy to get the business of consumers is something that ____, ____

- government makes the WHAT, HOW, and FOR WHOM to produce decisions. - their consumers have a narrower range of goods from which to choose. - command societies grow slower than free enterprise capitalist ones.

The lack of a profit motive in a command society is one of the reasons ____, ____, ____

competition

The struggle among sellers to attract consumers with the best products at the lowest prices is best known as

sovereignty

The term "consumer ____" recognizes the role of the consumer as ruler of the market.

sometimes

The unique thing about economic and social goals is that they _____ conflict with one another.

- Some people will always demand protection or social services from the government. - Some services such as national defense and a system of laws and justice cannot be supplied by the private sector alone.

Why will some government involvement always be present in the U.S. economy?

false

True or false: An advantage of free enterprise capitalism is how it increases wealth across all elements of American society.

true

True or false: Relatively small day-to-day changes in prices collectively help a free enterprise economy adjust to change.

true

True or false: The choice between conflicting economic goals will always have opportunity costs that must be considered.

incentive, motivation, or encouragement

Under a system of free enterprise capitalism, private property rights give people the ____ to work, save, and invest.

many of the WHAT and FOR WHOM to produce questions are answered by a central authority.

Voluntary exchange is reduced in a command or mixed socialist economy because ___

wealth is the total amount of tangible, scarce, useful, and transferable products.

Wealth is created whenever new and different products are produced for consumers. This happens because ___

- The ability of the economy to adjust to change - A wide variety of goods and services produced - Wealth creation - Individual freedom

What are benefits of free enterprise capitalism?

- Businesses can produce the products they think will be the most profitable. - Businesses can charge whatever price they choose.

What does economic freedom grant to businesses in a free enterprise economy?

- The freedom to choose your occupation - The freedom to choose your employer - The freedom to choose your job location

What economic freedoms would be denied to you if you lived in a command economy?

- Someone who chooses his or her own occupation - A business that decides what it wants to produce

What is an example of economic freedom?

- Medicare - Social Security

What programs exemplify the broad social and economic goal of economic security?

provider

When the government supplies subsidies, such as payments to agriculture or funds for public welfare, the government is fulfilling its role as a ____

suppliers tend to combine with other suppliers, which results in fewer but larger suppliers.

When we talk about large "supply-side" tendencies in capitalism, we mean that ____

Most people hope to have more things in the future than they have right now.

Why is economic growth a major goal of most Americans?

The entrepreneur is an agent of economic change and progress in his or her search for profits.

Why is the entrepreneur essential to a free enterprise economy?

wide

free enterprise results in a ____ variety of goods and services as producers compete for the dollars spent by consumers.

profit

we use the term ___ to describe the extent to which the revenue from sales exceeds the full opportunity cost of the resources involved in producing products sold.