Economics Chapter 1-3

What is the key factor in determining the type of economy a country has?

• public and private sector
• what will be produced, how it will be produced, and for whom it will be produced
• the availability of resources and demand
• the extent of government involvement

What are some characteristics of a free market economy?

• lack of choice, competition
• individual choice, centrally-planned
• competition, consumer freedom

• central ownership of property, profit

Name a country that has a command economy.

• United States
• Great Britain
• Germany
• N. Korea

What type of economy has a private and public sector, the characteristics of a free market, and is the most common economic system today?

• Free Market Economy
• Mixed Economy
• Command Economy
• Traditional Economy

What type of economy does the USA have?

• Mixed
• Free Market
• Command
• Traditional

What happens in the product market? 

• Income is received for supplying land, labor, or capital.
• Governments collect taxes from firms and consumers.
• Firms purchase the factors of production from households.
• Households purchase the goods and services that firms produce.

Economics is...

• studying people and choices

• studying trees, bushes, and other plants.

• studying animals and wildlife.

• studying food, and how food is made.

Driving a car on crowded highway?

• Negative externality
• Positive externality

•Neighbor playing loud music while you study?

• Negative Externality
• Positive Externality

•New landscaping in neighbor’s yard?

• Negative externality
• Positive externality