Primavera Economics Unit 2 Workbooks and Checkpoints

Which famous economist wrote 'The Wealth of Nations'?

Adam Smith

Which political theory allows for voluntary cooperation between citizens and the absence of government?

Anarchism.

Review the budget. (Graph.) Which is best classified as a want?

Cable.

The free enterprise economy is most closely aligned with which system?

Capitalism.

Which political system favors individual economic freedom and free market competition?

Capitalism.

Which is considered a need?

Daily meals.

How does deposit insurance help prevent a bank panic?

Depositors are less likely to worry about their money and create a run on the bank by withdrawing their funds.

What were the functions of the Tennessee Valley Authority Act? (Select all that apply.)

Develop agriculture and forest land in the valley, Improve navigation along the Tennessee River.

Which are advantages of a traditional economic system? (Select all that apply.)

Everyone knows about their economic role, Little uncertainty exists about what or how to produce.

Which government agency provides consumer protection in a case of a bank failure and plays a direct role in the US economy?

Federal Deposit Insurance Company.

Which economic system is based on private ownership of goods and private decisions to invest in trade of business industries, with the intent of making a profit?

Free enterprise economy.

Which are characteristics of a free market economic system? (Select all that apply.)

Freedom of choice to do business, Unequal distribution of basic needs.

Which characteristics of capitalism drive retail companies to produce better goods and services by the best workers? (Select all that apply.)

Freedom, Competition

Read the sentence. Capitalism drives the constant rotation of business opportunity, [blank], and failure. Which most accurately completes the sentence?

Growth

Read the scenario. While Paul's neighbor recovers from food surgery, Paul walks her dog daily. He enjoys it so much that he decides to start a dog walking business. What is Paul's next step?

He should ask himself how to get started and who to market the business to.

Why is scarcity referred to as the fundamental economic problem?

Individuals, businesses, and countries all face the problem of scarcity.

What economic theory was proposed by Adam Smith and explains that an economy's success is determined by people's ability to pursue their own financial self-interest?

Invisible hand.

What benefits does competition bring to consumers? (Select all that apply.)

It can lead to lower prices for consumers on goods and services, It offers consumers more choices in the marketplace.

What can happen when the United States government plays a direct role in the economy? (Select all that apply.)

It competes with private businesses, It operates as a monopoly, It acts as an employer.

What does the JOBS Act do for the companies? (Select all that apply.)

It gives private companies more access to capital from various sources, It makes it easier for certain companies to go public on US stock exchanges.

How does business competition impact the consumer?

It helps them because it keeps the price of goods low

How is the JOBS Act helping to stimulate business? (Select all that apply.)

It permits companies to sell securities through crowdfunding or the Internet, It offers easier registration for a public company under federal regulations.

What is the primary function of the Federal Deposit Insurance Corporation?

It provides consumers protection in case of a bank failure.

What effect does government regulation have on businesses?

It takes away some economic freedom from businesses to ensure economic freedom for consumers.

Read the scenario. Ann owns two acres of trees. Which factors of production would Ann's situation fall under? (Select all that apply.)

Land, Capital.

Read the statement. One weakness of a free market economy is instability. Which argument would supporters of a free market economy most likely use to argue that instability is acceptable?

Market corrections are difficult but necessary. The benefits people receive from innovation and freedom in a free market system are worth the cost of instability.

Which disadvantage of a free market economy is most likely to lead to high unemployment?

Market failure.

Read the sentence. The housing bubble expanded in 2003 when [blank] were at a 50-year low. Which best completes the sentence?

Mortgage interest rates.

Read the scenario. Kristine and Katherine are looking to team up. They want an already established business with a great corner store location and the independence to make something good turn into something better. Which are their best options? (Select all that apply.)

Partnership, Franchise.

Which is a description of scarcity?

People have limited resources, so they must pick which wants to satisfy.

Which are considered goods? (Select all that apply.)

Pool table, Couch, Computer.

Which are examples of free enterprise?

Private property, profit motive, competition.

Which characteristics of capitalism provide an opportunity for entrepreneurship and allow both buyers and sellers to feel they made a return on an investment? (Select all that apply.)

Profit motivation, Innovation

What were the goals of the Tennessee Valley Authority Act? (Select all that apply.)

Provide power at a lower cost, Improve the economy of the Southeast.

Which are regulations the government may impose on businesses?

Requirements to protect consumers as well as workers, Requirements to ensure that they participate in competition, Requirements to provide accurate information to consumers.

Which is true about scarcity?

Scarcity exists because people have unlimited wants and limited resources.

Read the sentence. When society does not have enough resources to produce all of the things people want, it is known as [blank]. Which correctly completes the sentence?

Scarcity.

Which are characteristics to consider when defining a service? (Select all that apply.)

Services are intangible activities, Services require payments.

Which are considered services? (Select all that apply.)

Serving food, Tailoring a suit, Housecleaning.

Which political system favors an economic structure in which the means of production are owned and monitored by the government?

Socialism.

Which law did President George W. Bush sign to buy toxic assets from financial institutions?

TARP

The Tennessee Valley Authority Act helped open which river up for trade and navigation?

Tennessee River.

Which is true regarding the FDIC?

The FDIC takes over for failed banks.

Which accurately describes why the FDIC was created?

The FDIC was created in 1933 after many bank failures caused the Great Depression.

In a free market economy, which is true regarding the role of the consumer?

The consumer determines what is produced.

What does macroeconomics deal with?

The economy as a whole.

Which is an example of the indirect role of the government in the economy?

The government passes laws that keep electricity rates affordable.

In a command economy, who answers the three fundamental economic questions?

The government.

What does microeconomics deal with?

The impact of individual and business decisions on economic markets.

What is the definition of economics?

The production, distribution, and consumption of goods and services in one country.

Which is an advantage of the sole proprietorship and partnership business models?

They are both easy to set up.

Which is a function of the Federal Deposit Insurance Corporation (FDIC)? (Select all that apply.)

Verify soundness of insured banks, Protect consumer rights, Notify depositors when a bank closes.

Read the statement. In a command economy, labor is a resource that must be allocated. What is meant by this statement?

A central planning authority decides what job each person has.

What is a characteristic of a need?

A need is something you cannot live without, such as water.

Which is an example of specialization?

A person studies nursing and works in a hospital.

Read the scenario. Madison received $100 as a holiday gift. She used it to buy 50 mineral infused candles for $2 each. Then, she walked around the neighborhood and sold the candles for $4 each. What factors of production did Madison use?

All four factors of production.

Which are considered producers? (Select all that apply.)

Car mechanic, Car salesman, Car builder.

Read the sentence. For a free enterprise system to exist, individuals need to be able to make [blank]. Which best completes the sentence?

Choices.

In which political system does the government own all businesses and the economy?

Communism.

Which are characteristics that make up capitalism? (Select all that apply.)

Competition, Freedom.

Entrepreneurs who like a challenge and are dedicated to bringing their ideas to life have which qualities?

Competitive and innovative.

What were results of the federal government deregulating the airline industry in 1978, known as the Airline Deregulation Act? (Select all that apply.)

Consumers gained better (lower) prices for airfare, Large airlines were able to improve productivity, Many small airlines went out of business.

What were the top two purposes of the Tennessee Valley Authority Act? (Select all that apply.)

Control flooding in the valley, Create employment in the valley.

What were some of the tasks of the Tennessee Valley Authority Act? (Select all that apply.)

Generate and provide hydroelectric power to the valley, Manufacture nitrates and phosphorus for creating fertilizer.

Which best describes Robert Owen's political ideology and its impact on business?

He was a utopian socialist who believed that workers would flourish in a cooperative environment.

Read the scenario. Georgia wants to open her own business. She is looking for flexible hours, low overhead costs, and no need for a physical store with total control of the company. What are her best options? (Select all that apply.)

Home-based business, Online business.

Read the sentence. Carlos has decided to sell T-shirts to his classmates. Which economic question does Carlos still need to answer?

How to produce.

Read the sentence. Subprime mortgages allowed many individuals to become homeowners; however, sometimes their credit scores were [blank]. Which most accurately completes the sentence?

Poor.

Which are characteristics of a command market system? (Select all that apply.)

Priorities for the production of goods, Stricter laws to regulate economic activity.

What is the consumer's role in the marketplace?

Someone who acquires and uses goods and services through economic exchanges.

Read the sentence. The housing bubble was caused in part by people buying homes to fix and sell for a higher price. What is this known as?

Speculating.

Which are characteristics of a traditional market system? (Select all that apply.)

Strong community network, Predominance of agriculture.

An entrepreneur with the ability to motivate others in a collaborative environment that fosters team goals and work productivity has which qualities?

Strong leadership and vision.

Read the sentence. The US government plays an impactful role in the economy, both directly and indirectly. Which is an example of the federal government indirectly affecting the market economy?

The US government provides social security benefits for senior citizens.

What do the three basic economic questions determine?

The allocation of resources.

Which explains the US government's role in promoting competition?

The government plays an active role in promoting competition at all levels.

What are advantages of a mixed market economic system? (Select all that apply.)

The government provides essential services, Competition lowers prices and increases choices, The private sector is encouraged to make profits.

Which best describes Karl Marx's viewpoint on capitalism and the emergence of Communism?

The proletariat will overthrow the bourgeoisie due to inequalities resulting in a classless society.

What is true regarding taxes in a market economy?

They tend to be low in order to encourage work.

Why do entrepreneurs ask the three basic economic questions?

They want to use their resources wisely to make a profit.

Why was the Federal Deposit Insurance Corporation (FDIC) created?

To protect people's deposits in the event of a bank failure.

Why did the US government establish the FDIC

To provide deposit insurance for banking customers.

What is the primary role of producers in the marketplace?

To provide goods and services.

Which accurately describes aspects of a partnership business structure? (Select all that apply.)

Two or more individuals share the losses incurred by a business, Two or more individuals share the profits generated by a business.

What is one fundamental principle, or question, of economics?

What should the country produce?

What are the three basic economic questions?

What to produce, how to produce, for whom to produce.

What is specialization?

When an individual becomes an expert in a particular area.

In which situation is the US government most likely to regulate the marketplace?

When business practices decrease competition.

When do entrepreneurs answer the three basic economic questions?

When they are evaluating their resources to decide what to sell.