Chapter 2 and 3 Economics Chapter 2 and 3 Economics

First part of Jeopardy deals with Chapter 2

Level of economic prosperity:

Standard of Living

The concentration of the productive efforts of individuals and businesses on a limited number of activities:

Specialization

The structure of methods and principles that a society uses to produce and distribute goods and services (2 words):

Economic System

An individual’s own personal gain:

Self-Interest

Another name for a centrally planned economy.

Command Economy

The hope of reward or fear of penalty that encourages a person to behave in a certain way:

Incentive

The arena of exchange in which firms purchase the factors of production from households: A) Profit B) Factor Payment C) Factor Market D) Consumer Sovereignty

C) Factor Market

The power of consumers to decide what gets produced: A) Profit B) Factor Payment C) Factor Market D) Consumer Sovereignty

D) Consumer Sovereignty

The struggle among producers for the dollars of consumers:

Competition

A set of government programs that protect people who face unfavorable economic conditions is called a _______ _____.

Safety Net

The amount of money a business receives in excess of its expenses:

Profit

An economic system that relies on habit, custom, or ritual to decide the three key economic questions.

Traditional Economy

The income people receive in return for supplying factors of production: A) Profit B) Factor Payment C) Factor Market D) Consumer Sovereignty

B) Factor Payment

A range of economic and political system based on the belief that wealth should be evenly distributed throughout society: A) Communism B) Authoritarian C) Capitalism D) Socialism

Describing a form of government that limits individual freedoms and requires strict obedience from its citizens: A) Communism B) Authoritarian C) Capitalism D) Socialism

B) Authoritarian

True or False: A political system in which the government owns and controls all resources and means of production and makes all economic decisions is called communism.

True

The doctrine that government generally should not intervene in the marketplace:

Laissez Faire

The process of selling businesses or services operated by the government to individual investors, and then allowing them to compete in the marketplace:

Privatization

An economic system in which investments in firms are made in a free market by private decisions rather than state control: A) Free Enterprise System B) Mixed Economy C) Incentive D) Competition

A) Free Enterprise System

A person or group of people living in a single residence: A) Firm B) Invisible Hand C) Household D) Trick question—none of the above

C) Household C) Household

An organization that uses resources to produce or service, which it then sells: A) Firm B) Invisible Hand C) Household D) Trick question—none of the above

A) Firm

This man coined the ‘invisible hand’ to describe self-regulating nature of the marketplace:

Adam Smith

A market-based economic system in which the government is involved to some extent: A) Traditional Economy B) Command Economy C) Market Economy D) Mixed Economy

D) Mixed Economy

Property that is owned by individuals or companies, not by the government or the people as a whole (2 words):

Private Property

The arena of exchange in which households purchase goods and services from firms: A) Product Market B) Factor Market C) Factor Payment D) Incentive

A) Product Market

The process of bringing new methods, products, or ideas into use: A) Profit B) Innovation C) Standard of Living D) Safety Net

B) Innovation

Any arrangement that allows buyers and sellers to exchange things: A) Standard of Living B) Profit C) Innovation D) Market

Second part of Jeopardy deals with Chapter 3

A commitment to the value of work:

Work Ethic

A proposed law submitted directly to the public: A) Referendum B) Obsolescence C) Patent D) Copyright

A) Referendum A) Referendum

Situation in which older products and processes become out-of-date: A) Referendum B) Obsolescence C) Patent D) Copyright

B) Obsolescence

The principle that everyone has the same legal rights: A) Private Property Rights B) Legal Equality C) Voluntary Exchange D) Interest Groups

B) Legal Equality

True or False The principle that people decide what agreements they want to enter into is called private property rights.

FALSE This is called Free Contract

The concerns of a society as a whole: A) Public Disclosure Laws B) Gross Domestic Product C) Eminent Domain D) Public Interest

The right of a government to take private property for public use: A) Public Disclosure Laws B) Gross Domestic Product C) Eminent Domain D) Public Interest

C) Eminent Domain

True/False: Laws requiring companies to provide information about their products or services is called public disclosure laws.

True

The dollar value of all final goods and services produced within a country’s borders in a given year: A) GNP (Gross National Product) B) GDP (Gross Domestic Product) C) NDP (National Domestic Product) D) USP (United States Product)

B) GDP (Gross Domestic Product)

The principle that anyone can compete in the marketplace: A) Profit Motive B) Free Contract C) Legal Equality D) Open Opportunity

D) Open Opportunity

Love of one’s country:

Patriotism

Something which benefits a good or service when they don’t purchase an item: A) Positive Externality B) Negative Externality C) Public Good D) Average Externality

A) Positive Externality

A shared good or service for which it would be inefficient or impractical to make consumers pay individually and to exclude those who did not pay: A) Average Externality B) Negative Externality C) Public Good D) Positive Externality

C) Public Good

Give two examples of a public good….

1. Public Education 2. Highway System 3. Law Enforcement 1. Public Education 2. Highway System 3. Law Enforcement

True/False: Market failure is a situation in which the free market, operating on its own does not distribute resources efficiently.

True

A period of macroeconomics expansion, or growth, followed by one of contraction, or decline: A) Referendum B) Business Cycle C) Gross Domestic Product D) Public Sector

B) Business Cycle

The cost of producing a good or service to be paid for by someone other than the producer:

Negative Externality

A license that gives the inventor of a new product the exclusive right to sell it for a specific period of time:

Patents

Patents in the United States are for how long: A) 10 years B) 17 years C) 20 years D) 23 years

C) 20 years

The part of the economy that involves the transaction of the government: A) Obsolescence B) Referendum C) Free Rider D) Public Sector

D) Public Sector

True or False: An in-kind benefits is a financial award given by a government agency to a private individual or group in order to carry out a specific task.

False This is called a grant

True or False: Direct payments of money by the government to the poor, disabled, and retired people is called welfare.

False This is called cash transfers

An income level below that which is needed to support families or households:

Poverty Threshold

A private organization that tries to persuade public officials to act in ways that benefit its members: A) Interest Group B) Eminent Domain C) Private Property Rights D) Legal Equality

A) Interest Group

A government document that grants an author exclusive rights to public and sell creative works:

Copyright

The incentive that drives individuals and business owners to improve their material well-being: A) Open Opportunity B) Economic Transition C) Profit Motive D) Laissez Faire

C) Profit Motive

For one point, name all FIVE of the basic principles of Free Enterprise the U.S. uses today:

1.Profit motive 2. Open Opportunity 3. Legal Equality 4. Private Property 5. Freedom to Buy and Sell 1.Profit motive 2. Open Opportunity 3. Legal Equality 4. Private Property 5. Freedom to Buy and Sell

Last Question : Give an example of a positive externality.

Answers will vary…

Last Question : Give an example of a negative externality.

Answers will vary…