Ch 3 Objectives + Key Terms
Legal equality
Equal rights to all
In-kind benefits
Goods and services provided by the government for free or at greatly reduced prices
Cash transfers
Direct payments of money to eligible money
A key reason for public disclosure laws is to a) protect consumers b) promote a positive business climate c) clean up the environment d) add dollars to state budgets
A
Free contract is the a) concept that people may decide what agreements they want to enter into b) rivalry among sellers to attract customers while lowering costs c) concept that individuals should not have to pay anything to enter into a contract d) concept of giving everyone the same legal rights
A
How does a country such as the United States increase its productivity? a) through a strong work ethic and the use of technology b) by lowering wages and lengthening the workday c) through regulations that limit innovation d) by raising wages and shortening the workday
A
Open opportunity is the... a) concept that everyone can compete in the marketplace b) concept of giving everyone the same legal rights c) rivalry among sellers to attract customers while lowering costs d) concept that people have the right to do as they wish with their possessions
A
The process, which incorporates innovation, to produce a good or service a) technology b) the profit motive c) open opportunity d) the gross domestic product
A
Which of the following is a negative effect of government regulation? a) Government regulations can be costly for businesses to implement and may cut into profits. b) Government regulations can protect consumers' health. c) Government regulations define air traffic control and piloting standards. d) Government regulations recognize the rights of disabled individuals.
A
Work ethic
A commitment to the value of work and purposeful activity
Welfare
A general term that refers to government aid to the poor
Business cycle
A period of a macroeconomic expansion followed by a period of contraction
Public good
A shared good or service for which it would be impractical to make consumers pay individually and to exclude non-payers
Market failure
A situation in which the market, on its own, does not distribute resources efficiently
Externality
An economic side effect of a good or service that generates benefits or costs to someone other than the person deciding how much to produce or consume
Poverty threshold
An income level below that which is needed to support families or households
Giving consumers the freedom to make their own economic choices is the fundamental purpose of a) a centrally planned economy b) the free enterprise system c) consumerism d) socialism
B
Macroeconomics is... a) the study of the economic behavior and decision making of small units, such as individuals, families, and businesses. b) the study of the behavior and decision making of entire economies. c) the concept that everyone can compete in the marketplace. d) a commitment to the value of work and purposeful activity.
B
The force that encourages people and organizations to improve their material well-being is known as a) a legal equality b) profit motive c) public interest d) pubic disclosure
B
What is one way the federal government does NOT help stabilize the economy a) It influences interest rates b) It fixes prices for products c) It provides jobs d) It promotes steady growth
B
Work ethic is a) a period of macroeconomic expansion followed by a period of contraction. b) a commitment to the value of work and purposeful activity. c) the study of the behavior and decision-making of different economic systems. d) the study of the economic behavior and decision making of small units, such as individuals, families, and businesses.
B
American free enterprise is driven by the a) desire for economic equality b) need to make a living c) desire for profit d) need to own a home
C
The concept that people may decide what and when they want to buy and sell is a) competition b) public interest c) voluntary exchange d) legal equality
C
Why are patents and copyrights important? a) They protect consumers from buying faulty products. b) They provide a way for inventors to get their inventions manufactured. c) They provide inventors the possibility of making profits. d) They encourage businesses to sell copies of new products.
C
Why is the free enterprise system subject to business cycles? a) because of minor fluctuations like the day-to-day fluctuations of the stock market b) because the government plays a role in making decisions about factors such as prices, production, and consumption. c) because individuals and businesses acting in their own self-interest make economic decisions about factors such as prices, production, and consumption. d) because for each generation, the American Dream of a higher standard of living than their parents' generation becomes harder to reach
C
Complete the sentence to make a true statement. Competition... a) creates artificially high prices for products and services. b) allows most businesses to make a profit. c) slows down innovation in the marketplace. d) means consumers have more economic choices.
D
How do patents and copyrights encourage innovation? a) They grant companies the right to copy the inventions and creative works of individuals at little or no cost. b) They prevent inventors, writers, and other creative people from making huge profits, thus keeping prices low for consumers. c) They limit the number of inventions a single individual or business may patent or copyright, so more people have the opportunity to invent things. d) They give inventors and writers exclusive rights to produce and sell their inventions and works, possibly making large profits.
D
Laws requiring companies to provide full information about their products are called a) legal equality laws b) free contract laws c) open opportunity laws d) public disclosure laws
D
The business cycle is a) the study of the economic behavior and decision making of small units, such as individuals, families, and businesses. b) the study of the behavior and decision making of entire economies. c) a commitment to the value of work and purposeful activity. d) a period of macroeconomic expansion followed by a period of contraction.
D
The total value of all final goods and services produced in a particular economy is called a) the work ethic b) microeconomics c) macroeconomics d) the gross domestic product
D
Public disclosure law
Laws that require companies to provide consumers with important information about their products, such as fuel efficiency of automobiles, side effects of medication
Gross domestic product (GDP)
One measure of a nation's macroeconomy GDP is the total value of all final goods and services produced in a particular economy
Interest group
Private organizations that try to persuade public officials to vote according to the interests of the groups' members
Free rider
Someone who would not choose to pay for a certain good or service, but who would get the benefits of it anyway if it is provided as a public good
Open opportunity
The ability for anyone to compete in the marketplace
Public interest
The concerns of the public as a whole Both state and federal governments involvement in concerns of the public as a whole, such as environmental protection, sanitary food production
Profit motive
The drive for the improvement of material well-being
Public sector
The part of the economy that involves transaction of the government
Private sector
The part of the economy that involves transactions of individuals and businesses, would have little incentive to produce public goods
Private property rights
The right to control your possessions as you wish
Free contact
The right to decide what agreements in which you want to take part
Voluntary Exchange
The right to decide what and when you want to buy and sell a product
Competition
The rivalry among sellers to attract consumers
Macroeconomics
The study of the behavior and design making of entire economies
Microeconomics
The study of the economic behavior and decision making of small units such as individuals, families, and businesses
