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The Free Market System Flashcards | StudBud
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The Free Market System
The Free Market System
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Intro to Economic Systems
Flashcards
20 cards
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Practice quiz
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Questions
20
Answers
1
The United States is a .....
traditional economy
command economy
mixed economy
free market economy
2
Based on a supply and demand graph, setting a maximum price lower than market equilibrium is called a _____.
price floor
collusion
price ceiling
price manipulation
3
Based on a supply and demand graph, setting a minimum price higher than market equilibrium is called a _____.
price ceiling
price floor
price manipulation
collusion
4
What are capital goods?
Goods that don't behave according to supply and demand rules.
Goods that buyers will pay more for if the situation demands it.
The most basic components that are used to create finished goods.
Equipment used to access/convert natural resources to consumer goods.
5
The MOST important element in the free market is _____.
competition
government regulation
cooperation
6
In a free market economy, _____ answer(s) the three economic questions.
the government
labor
buyers and sellers
the rich and/or powerful
7
Adam Smith would NOT have approved of this government supported action/group:
Prisons
Police Department
Tariffs
Public Roads
8
Based on a supply and demand graph, a price floor will create a ______.
surplus
shortage
9
Based on a supply and demand graph, a price ceiling will create a ______.
surplus
shortage
10
Economics is best defined as the study of...
money
budgets
choices
taxes
11
Adam Smith wrote
Crime and Punishment
Death and Taxes
Trade and Competition
Wealth of Nations
12
What economic law is this: When prices increase, quantity increases.
Law of Economic Reasoning
Law of Supply
Law of Gravity
Law of Demand
13
The second choice given up for the first choice is a...
opportunity cost
trade off
scarcity
surplus
14
The concept of Absolute Advantage means nations should....
take over smaller countries who aren't as powerful.
become the best at making everything.
make what they do best and trade for the rest.
buy everything from other countries.
15
When buyers & sellers come to an agreed price for mutual benefit, Adam Smith called this the...
invisible hand
sweet spot
profit maximum
Smith sale
16
Scarcity means there are....
limited wants and limited resources
unlimited wants and limited resources
limited wants and unlimited resources
high taxes
17
Which of the following is NOT an outcome of NAFTA?
Lower prices
Job loss in some industries
Access to new goods
Increased military spending
18
Which is NOT a factor of production
Entrepreneurs
Labor
Efficiency
Capital Goods
19
The two primary products of our economy.
Goods and Services
Guns and Butter
Fish and Wheat
Profits and Losses
20
Which is NOT one of the three questions of production?
How will it be produced?
Why should this be produced?
For whom should it be produced?
What should be produced?
