Q3

Centrally planned economy

A system in which the society's leaders, usually members of the central government, make _____ economic decisions

Authoritarian

A system which requires absolute _____ to leadership, often one leader personally

Market demand schedule

A table that shows how much of a good or service _____ consumers are willing and able to buy at each price in a market

Market supply schedule

A table that shows how much of a good or service all _____ are willing and able to offer for sale at each price in a market

Demand schedule

A table that shows how much of a good or service an individual consumer is will and able to purchase at each _____ in a market

Supply schedule

A table that shows how much of a good or service an individual producer is will and able to offer for sale at each _____ in a market

Voluntary exchange

A trade in which the parties involved anticipate that their personal benefits will _____ their cost(s)

Positive economics

A way of describing and explaining economics as it is, _____ as it should be

Normative economics

A way of describing and explaining what economic behavior _____ to be, not what it actually is

Product market

The _____ for goods and services, the market most recognized by consumers

Open opportunity

The ability of everyone to enter and compete in the marketplace of personal free _____

Economics

The study of how people choose to use scarce resources to satisfy their _____

Macroeconomics

The study of the behavior of an economy as a whole, involving inflation, _____, aggregate demand, and aggregate supply

Microeconomics

The study of the behavior of individual players, such as individuals, families, and businesses, _____ an economy

Services

Work that one person performs for another in exchange for _____

Specialization

A situation in which people concentrate their efforts in the areas in which they have an _____

Free contract

A situation in which people decide for themselves which legal _____ to enter into

Laissez faire

A French phrase, 'leave things alone,' associated with Jefferson's belief that the government that governs least governs best, or that there is no _____ for government involvement

Statistics

A branch of mathematics dealing with numerical _____ collection, organization, analysis, interpretation, and presentation

Market failure

A situation in which people who are not part of a marketplace interaction benefit from it or _____ part of its costs

Subsidy

A government payment that helps cover the cost of an economic activity that is considered to be in the _____ interest

Market demand curve

A graph that shows all the data found in the _____ demand schedule

Demand curve

A graph that shows how much of a good or service an _____ will buy at each price

Supply curve

A graph that shows how much of a good or service an individual _____ is willing and able to offer for sale at each price

Market supply curve

A graph that shows the data from the market _____ schedule

Production possibilities curve (PPC)

A graph used to show the maximum number of goods or services that can be produced using _____ resources

Total revenue test

A measure of elasticity that compares the total revenue a business would receive when offering its products at _____ prices

Elasticity of demand

A measure of how _____ consumers are to price changes in the marketplace

Modified free enterprise economy

A mixed economy which includes some government protections, provisions, and regulations to _____ the completely free enterprise system

Circular flow model

A model that visualizes how all interactions of the two key economic _____ makers, households and businesses, occur

Public transfer payment

A payment in which the government transfers income from taxpayers to recipients who do not pay _____ in return

Free rider

A person who does not pay for a good or service but who benefits from it when it is _____

Producer

A person who makes goods or provides _____

Externality

A side effect of a transaction that _____ someone other than the producer or buyer

Legal equity

A situation in which everyone has the same economic rights under the _____

Global economy

All the economic interactions that cross _____ boundaries

Land

All the natural _____ found on or under the ground that are used to produce goods and services, including water, forests, minerals, and wildlife

Capital

All the resources made and used by people to _____ and distribute goods and services

Change in demand

Also called a shift in demand, this type of change in the marketplace is caused by a change income, market size, consumer tastes, consumer expectations, substitute or _____ products

Capitalism

An economic system based on _____ ownership of the factors of production

Market economy

An economic system based on individual _____, not government directives

Traditional economy

An economic system in which families, clans, or tribes make economic decisions based on customs and beliefs that have been handed down through _____s

Socialism

An economic system in which the government _____ some or all of the factors of production

Command economy

An economic system in which the government decides what and _____ goods and services will be produced and distributed

Communism

An economic system in which the government owns all of the factors of production, and there is no _____ ownership of property; according to the textbook, also with little to no political freedom

Mixed economy

An economic system that has elements of market economies and planned economies, the most _____ type

Positive externality

An externality that is a _____ effect, or benefit, for people who were not involved in the original economic activity; for example, one of your neighbors maintains a beautiful rose garden, and all the surrounding homes benefit from the beauty

Negative externality

An externality that is a _____ effect, or cost, for people who were not involved in the original economic activity; for example, one of your neighbor's rock band practices loudly late at night, and all the surrounding homes suffer from the noise

Free enterprise system

Another term for _____, in which anyone is free to start a business or enterprise

Market

Any place or situation in which people buy and sell resources, _____, and/or services

Law of increasing opportunity costs

As shown by the PPC, as production switches from one product to another, increasingly more resources are needed to increase the production of the second product, which causes opportunity costs to _____

Incentives

Benefits offered to encourage people to act in _____ ways

Wants

Desires that can be _____ by consuming a good or service

Cost-benefit analysis

Examination of the costs and expected benefits of a _____

Profit

Financial _____ from a business transaction

Public goods

Goods and services that are provided by the government and _____ by the public

Substitutes

Goods and services that can be used in place of original items and demand for which rises when their prices _____ relative to the originals

Inferior goods

Goods that consumers demand _____ of when their incomes rise

Normal goods

Goods that consumers demand _____ of when their incomes rise

Safety net

Government programs designed to protect people from economic _____

Goods

Physical _____ that can be purchased, such as food, clothing, and furniture

Economic models

Simplified representations of _____ economic activities or problems

Trade off

The alternative given up when making an economic _____

Total revenue

The amount of _____ a company receives for selling its products or services

Utility

The benefit or satisfaction gained from the _____ of a good or service

Marginal benefit

The benefit or satisfaction received from using one _____ unit of a good or service

Change in quantity demanded

The change in the amount of a product consumers will buy because of a change in _____

Income effect

The change in the amount of a product that a consumer will buy because personal purchasing power changes, even though the income itself does _____ change

Entrepreneurship

The combination of vision, skill, ingenuity, and willingness to take risks that is needed to create and run new businesses, typically through _____ in developing new products, services, methods or production, distribution, or marketing

Efficiency

The condition in which economic resources are being used to produce the _____ amount of goods and services

Underutilization

The condition in which economic resources are not being used to their full _____

Marginal cost

The cost of using _____ more unit of a good or service

Demand

The desire to have some good or service and the ability to _____ for it

Law of supply

The economic principle that producers are willing to sell _____ of a good or service at a higher price than they are a lower price

Law of demand

The economic principle that when the price of a good or service fall, consumers buy _____ of it

Factors of production

The economic resources needed to _____ goods and services

Law of diminishing marginal utility

The economics principle that states the marginal benefit from using each additional unit of a good or service in a given time period tends to _____ as each is used

Competition

The effort of two or more people, acting independently, to get the business of others by offering the best _____

Infrastructure

The goods and services that are necessary for the smooth _____ of society, such as highways, power and water systems, education and health care systems, plus police and fire protection

Scarcity

The situation that exists when there are not enough resources to meet human _____

Labor

The human time, effort, and talent that go into the making of _____

Consumer sovereignty

The idea that because consumers are free to purchase what they want and refuse the products they don't want they have ultimate _____ over what is produced

Profit motive

The incentive that encourages people and organizations to improve their material well-being be seeking to gain from _____ activities

Elastic

The kind of demand for which a change in demand causes a relatively _____ change in the quantity demanded

Inelastic

The kind of demand for which a change in demand causes a relatively smaller change in the quantity _____

Unit elastic

The kind of demand for which the percentage change in price and quantity demanded are the _____

Private property rights

The legal ability for people to personally possess objects, their _____, and personal intellectual achievements as their own and to exchange them with others upon agreement

Factor market

The market for factors of _____: land, labor, capital, and entrepreneurship

Profit

The money left over after the costs of producing a product are _____ from the revenue gained by selling that product; financial _____ from a business transaction

Substitution effect

The pattern of behavior that occurs when consumers react to a change in the price of a good or service by buying a substitute product, one whose price has not changed but which offers a better _____

Consumer

The person who _____ goods or services for personal use

Opportunity cost

The value of the next-best _____, given up when choosing one alternative over another

Economic system

The way a society uses its scarce resources to satisfy its people's _____ wants

Supply

The willingness and ability to offer _____ for sale

Needs

Things such as food, clothing, and shelter, that are necessary for _____

Privatize

To change from government or public ownership of a resource or factor of production from to _____ ownership

Nationalize

To change from private ownership of a resource or factor of production from private to government or public _____

Economize

To make _____ according to analysis of the best combination of costs and benefits

Transfer payment

Transfers of income from one person or group to another even though the receiver does not provide any goods or services in _____

Complements

Two (or more) products which work in _____ with each other and increasing demand for one increases the demand for the other