Basic Economic Theory Vocabulary

The perpetual condition of having limited quantities of resources to meet unlimited wants:

• factors of production

• production possibilities curve

• scarcity

• opportunity cost

The philosopher Milton Friedman would be in favor of:

• Little government involvement in citizens lives but heavy regulations in the business sector of the economy.

• Government manipulating taxes and spending to influence the economy.

• Little government involvement in the private economy.

• Government ownership of all factors of production.

The idea that resources are limited; we don't have an unlimited supply of what we want

• scarcity
• supply
• demand
• inflation

In which economic system is the economy COMPLETELY controlled by the government?

• capitalism

• socialism

• communism

• anarchism

In which economic system do private individuals and government SHARE control of the economy?

• capitalism

• socialism

• communism

• anarchism

In which economic system do private individuals control the economy?

• capitalism

• socialism

• communism

• anarchism

Who is known as the father of capitalism, whose 1776 book "The Wealth of Nations" advocated laissez-faire theory?

• Karl Marx

• Adam Smith

• John Maynard Keynes

• F. A. Hayek

Classical/Austrian economist who believed in spontaneous order and individual freedom

• Friedrich Hayek

• Milton Friedman

• John Maynard Keynes

Ideas rose to power in the 1930s. Believed that government should do something to spark economic activity.

• Friedrich Hayek

• John Maynard Keynes

• Milton Friedman

The study of how people make choices given the limited resources they have.

• Economics

• Social Studies

• Sociology

• Psychology