Economics Study Guide

An economic system based on customs, history, and traditions. Often has phrase, "that's the way we have always done it."

• Natural Resource

• Traditional

• Capitalism

• Barter System

Economic system where government controls the means of production. Has phrase "we do as we are told".

• Traditional
• Command
• Free-Market
• Mixed

Economic System based on private ownership or property and supply/demand determine the production of goods and services.

• Traditional
• Command
• Free-Market
• Mixed

Which condition would lead an entrepreneur in Market economy to set the highest prices?

• There is a high demand from consumers, yet the supply is low
• There is a low demand from consumers and the supply is high
• There is a low demand from consumers and the supply is low

Someone who makes a good or supplies a service

• Pirate

• patent

• profit

• producer

Prior to the Industrial Revolution, cars were very expensive and only the rich could purchase them. Why did mass-production of the car allow everyone, not just the rich, to purchase it?(Think supply and demand)

• The middle class demanded a cheaper car, so Ford mass-produced cars.
• Mass-production increased the supply of cars and the price of cars dropped as a result.
• The assembly slowed down the production of cars, which made them more expensive.
• The AUW striked

Use the list to answer the question. Which Economic System is being described?

• Traditional
• Command
• Free Market
• Goods

Use the list to answer the question. This list describes characteristics of which type of government?

• Socialism
• Capitalism
• Communism
• Profit

Use the term and definition below to help you answer the following question. What is most likely true about profit motive?

• It is the basis of a traditional economy.
• It is most important in a socialist economy.
• It drives the economy of a communist nation
• It benefits an economy run on a free enterprise

When the price of gasoline goes up, what will the airlines do to continue to earn a profit?

• increase the prices of tickets
• increase the pay of their employees
• decrease the prices of tickets
• decrease the number of seats on the airplanes