Econ Chapter 2 Vocab Quiz

The structure of methods and principles a society uses to produce and distribute goods

• Factor Payments

• Economic System

• Standard of living

• Traditional Economy

The income people receive in return for supplying factors of production

• Factor Payments

• Economic System

• Standard of living

• Traditional Economy

Level of economic prosperity

• Factor Payments

• Economic System

• Standard of living

• Traditional Economy

Relies on habit, custom, or ritual to answer the three basic economic questions.

• Factor Payments

• Economic System

• Standard of living

• Traditional Economy

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

• Factor Payments

• Innovation

• Profit

• Safety Net

The process of bringing new methods, products, or ideas into use

• Factor Payments

• Innovation

• Profit

• Safety Net

Set of programs to protect people who face unfavorable economic conditions such as layoffs, injuries, or natural disasters.

• Factor Payments

• Innovation

• Profit

• Safety Net

Any arrangement that allows buyers and sellers to exchange things.

• Market

• Specialization

• Free Market Economy

• Household

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

• Market

• Specialization

• Free Market Economy

• Household

Answers to the three basic economic questions are made by voluntary exchange in markets

• Market

• Specialization

• Free Market Economy

• Household