Edmondson Chapter 17 Test Review

Question 1

___among producers lead to greater efficiency, higher quality products, and satisfied customers

Accepted Answer

competition

Question 2

Who makes most of the economic decisions in the US?

Accepted Answer

citizens

Question 3

The act of buyers and sellers freely and willingly engaging in market transactions

Accepted Answer

voluntary exchange

Question 4

GDP reflects the price of

Accepted Answer

finals goods and services

Question 5

Materials found in nature that make production possible

Accepted Answer

natural resources

Question 6

Tools, machinery, and buildings used to make products

Accepted Answer

capital

Question 7

Who is known as the father of modern economics

Accepted Answer

Adam Smith

Question 8

Products are bought and sold in this market

Accepted Answer

Product Market

Question 9

Where is the product market located on the circular flow model

Accepted Answer

Top

Question 10

Desire to earn money

Accepted Answer

profit motive

Question 11

Quality of life based on the possession of necessities and luxuries

Accepted Answer

standard of living

Question 12

Training and skills that improve production

Accepted Answer

human capital

Question 13

Where is the factor market located on the circular flow model

Accepted Answer

Bottom

Question 14

People who take risks to start new products

Accepted Answer

entrepreneurs

Question 15

What was the U.S. GDP in 2010?

Accepted Answer

15 trillion dollars

Question 16

Which business strategy is demonstrated by breaking a large job into small separate tasks?

Accepted Answer

division of labor

Question 17

Which transaction is counted in the GDP?

Accepted Answer

the purchase of a computer mouse pad from the store

Question 18

T/F Price in the US are established by supply and demand in markets

Accepted Answer

True

Question 19

The two forces that decide what producers produce and what consumers purchase

Accepted Answer

supply and demand

Question 20

Where do people sell their labor?

Accepted Answer

factor market

Question 21

Where is the business sector located on the circular flow model

Accepted Answer

Right

Question 22

GDP measures the amount produced within a country as well as a nation's

Accepted Answer

income

Question 23

What is the main way governments get the money they need to operate?

Accepted Answer

They collect taxes and borrow money

Question 24

Reason why the US marketplace can adapt quickly to changing economic conditions

Accepted Answer

economic freedom

Question 25

What does laissez faire economics mean?

Accepted Answer

"to let alone" little government interference

Question 26

Measure of how efficiently resources are used to create products

Accepted Answer

productivity

Question 27

Factors of Production are bought and sold in this market

Accepted Answer

Factor Market

Question 28

T/F Payment to mow the family lawn is included in the GDP

Accepted Answer

False

Question 29

Economists refer to the activity that takes place in the markets as

Accepted Answer

voluntary exchange

Question 30

Value of annual output in a country

Accepted Answer

GDP

Question 31

Of all the goods and services in the world, about how much does the US produce?

Accepted Answer

1/5

Question 32

T/F The government can act as a consumer in the product market

Accepted Answer

True

Question 33

The Gross Domestic Product measures the value of

Accepted Answer

all final products produced in country during specific year

Question 34

Breaking a big job into smaller, separate tasks

Accepted Answer

division of labor

Question 35

In a capitalist economy, many people invest their savings in businesses because

Accepted Answer

they hope to make a profit if the business succeeds

Question 36

Adam Smith argued that the best way for society to advance was for

Accepted Answer

people to work for their own self interest

Question 37

T/F GDP per capita is calculated by dividing a country's GDP by its population

Accepted Answer

True

Question 38

Why is the GDP per capita better measure than GDP when comparing economic activity of countries

Accepted Answer

it states GDP in terms of each person in the country

Question 39

Economic system in which citizens instead of government make most of the economic decisions

Accepted Answer

capitalism

Question 40

In a free enterprise system

Accepted Answer

own businesses with little government interference

Question 41

Concentrating on the goods and services produced most efficiently

Accepted Answer

specialization

Question 42

What are the two main participants in the circular flow of economic activity?

Accepted Answer

People & Business

Question 43

The incentive that drives the US economy is the

Accepted Answer

profit motive

Question 44

Owning, keeping and using something you purchase any way you wish

Accepted Answer

private property

Question 45

Where do exchanges of goods and services take place in the circular flow?

Accepted Answer

Product market

Edmondson Chapter 17 Test Review

Questions 45

Edmondson Chapter 17 Test Review

Questions 45