The American Economy

Chapter 19 Review56 Slides in 45 minutes

40 Question TestTime is a valuable economic resource

don’t waste it.

Property rights are a key element of capitalism and is protected in the Constitution under the Bill of Rights

What right which is protected in the Bill of Rights ensures our economic freedom and is a key element of capitalism?

What four factors of production make goods and services possible?

FactorsOf

Production

NaturalResources

HumanResources

Entrepreneurs

Capital

Land

Minerals

Water

Oil

Laborers

OwnerIdeas

Tools

Equipment

TechnologySpecialization

Consumer goods satisfy the consumers wants and needs. Such as…◦ Food, clothes, shelter, jewelry, cars

Capital goods are used to satisfy the producers needs. Such as…◦ Farm equipment, cloth, coal, oil, water

How do consumer goods differ from capital goods?

Factor markets are different from product markets because factor markets are where producers buy the supplies they need to create a product.

Product markets are those in which workers and consumers buy the products and services that they want and need.

How do factor markets differ from product markets?

Economic freedom is the right to choose the type of job or occupation one desires, as well as when and where to work.

What is economic freedom?

Education increases ones economic freedom.

What activity are you involved in right now which will increase your economic freedom?

What are the four sectors of economic decision makers?

EconomicSectors

Consumers

Business

Foreign

Government

Largest Sector

Smallest Sector

When people know they have the right to own and use property, they feel motivated to work, save, invest in property, and enjoy the rewards that come with ownership.

How do private property rights help promote capitalism?

To analyze how the economy is doing.

Why do economists study the Gross Domestic Product?

CapitalismFeatures

EconomicFreedom

PrivateProperty

VoluntaryExchange

ProfitMotive

Competition

FreeMarkets

Right protected in the 4th

Amendment of the Constitution

Gross DomesticProduct(GDP)

Productivity

StandardOf

Living

Goods Services Factors of production Natural resources Labor Capital Entrepreneur Gross Domestic Produ

ct (GDP) Standard of living

Market Factor market Product market Productivity Specialization Division of labor Economic interdepend

ence

Vocabulary

Tangible product that we use to satisfy our wants and needs.

Goods

Vocabulary

Work performed by a person for someone else.

Services

Vocabulary

Resources necessary to produce goods and services.

Factors of production

Vocabulary

The “gifts of nature” that makes production possible.◦Air◦Water◦Minerals◦Time◦Land

Natural Resources

Vocabulary

Human effort directed toward producing goods and services.

Labor

Vocabulary

Previously manufactured goods used to make other goods and services.

Capital

Vocabulary

Free and willing exchange of goods and services between buyers and sellers.

Market

Vocabulary

Individual who starts a new business, introduces a new product, and improves a management technique.

Entrepreneur

Vocabulary

Total dollar value of all final goods and services produced in a country during a single year.

Gross Domestic Product (GDP)

Vocabulary

The material well-being of an individual, group, or nation measured by how well their necessities and luxuries are satisfied.

Standard of living

Vocabulary

A market where productive resources are bought and sold.

Factor market

Vocabulary

When people, businesses, regions, and/or nations concentrate on goods and services that they can produce better than anyone else.

Specialization

Vocabulary

The degree to which resources are being used efficiently to produce goods and services.

Productivity

Vocabulary

A system in which private citizens own most, if not all, of the means of production and decide how to use them within legislated limits.

Capitalism

Vocabulary

The breaking down of a job into separate, smaller tasks to be performed individually.

Division of labor

Vocabulary

A reliance on others, as they rely on you to provide goods and services to be consumed.

Economic Interdependence

Vocabulary

A market where producers offer goods and services for sale.

Productive market

Vocabulary

The role of consumer as the ruler of the market, determining what products will be produced.

Consumer sovereignty

Vocabulary

The freedom to own and use our own property as we choose as long as we do not interfere with the rights of others.

Private Property Rights

Vocabulary

The struggle that goes on between buyers and sellers to get the best products at the lowest prices.

Competition

Vocabulary

The driving force that encourages individuals and organizations to improve their material well-being.

Profit motive

Vocabulary

Economic system where government should not interfere in the marketplace.

Laissez-faire economics

Vocabulary

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

Voluntary exchange

Vocabulary

The money a business receives for its products or services over and above its costs.

Profit

Vocabulary

Economic system in which individuals and businesses are allowed to compete for profit with a minimum of government interference.

Free enterprise

Vocabulary

a) total output of goods and services increases.

b) total output matches total input.c) human resources exceed their natural

resources.d) imports equal their exports.

Nations experience economic growth when their…

a) Serviceb) Capitalc) Consumerd) Final

What type of good or service is a sugar refinery?

a) fees collected from citizens using its services.

b) the factor market.c) taxes on individuals and businesses.d) the product market.

The government sector of the United States receives most of its revenues from…

a) permitting consumers to control the product market.

b) setting limits on competition among consumers.

c) allowing consumers to demand competitive prices.

d) providing incentives to make, save, and spend money.

Private property rights promote capitalism by…

a) Consumerb) Businessc) Governmentd) Foreign

Which sector of the economy sells products to and buys products from the United States?

a) divide large jobs into small, separate tasks.

b) focus on what they do best.c) offer incentives to workers.d) become self-sufficient.

Specialization helps improve productivity because it allows businesses to..

a) Individuals may buy and sell property without paying taxes.

b) Businesses may compete without government interference.

c) Buyers and sellers may conduct business voluntarily in the marketplace.

d) Individuals may start new business ventures at no cost.

Which of the following best defines free enterprise?

a) Workers lose jobs.b) Productivity goes up.c) Labor costs increase.d) The GDP goes down.

What happens when the same amount of input, used in the same amount of time, produces a greater amount of output?

a) Division of laborb) Specializationc) Human capital investmentd) Economic interdependence

What business strategy is demonstrated by the factory supervisor who breaks a large job into small, separate tasks?

a) Businessb) Consumerc) Foreignd) Government

Which sector of the economy buys the greatest percentage of final goods as measured by the Gross Domestic Product?

a) Production factorb) Human resource managerc) Entrepreneurd) laborer

Which of the following terms BEST describes an individual who starts a new business or introduces a new product?

a) Inputs and outputsb) Factors of production c) Factor markets d) Product markets

The resources needed to produce goods and services are called

a) Profit motiveb) Competition c) Free enterprised) Voluntary exchange

Which feature of capitalism is at work when buyers and sellers freely and willingly engage in market transactions?

a) Grants financial assistanceb) Offers no assistance c) Takes over the businessd) Restricts competition

When an entrepreneur starts a business that fails, the U.S government typically

a) The Carrillo family can buy everything they want and need.

b) The Vazquez family lives' within walking distance of the public library.

c) The Colunga family is happy that neighborhood crime is on the decline.

d) The Ayala family enjoy the warm winters of Michoacan.

Which of the following statements illustrates the standard of living as measured by the Gross Domestic product?

a) Practice innovation in their purchasing strategies.

b) Exercise their economic freedom.c) Set the prices of goods and services.d) Determine what products will be produced.

Consumer sovereignty means that consumers…

a) Back and forthb) Sequentialc) Circulard) Linear

Which of the following words best describes the flow of economic activity in a market system?

a) support laborers.b) encourage trade.c) stay out of the marketplace.d) help small and large businesses alike.

According to the laissez-faire philosophy of economics, government should generally…