AGBM 101 Exam 1 Question and
answers verified to pass
economic system - correct answer ✔a particular set of institutional
arrangements and a coordinating mechanism- to respond to the economizing
problem
laissez faire - correct answer ✔the government's role would be limited to
protecting private property from theft and aggression and establishing a legal
environment in which contracts would be enforced and people could interact
in market to buy and sell goods, services and resources
command system - correct answer ✔government owns most property
resources nd economic decision making is set by a central economic plan
created and enforced by the government; socialism/capitalism
market system - correct answer ✔capitalism/mixed economy
private property - correct answer ✔enables individuals and businesses to
obtain, use, and dispose of property resources they see fit
self-interest - correct answer ✔the motivating force of the various economic
units as they express their free choices
competition - correct answer ✔requires two or more buyers and two or more
sellers acting independently in a particular product or resource market;
freedom of sellers and buyers to enter or leave markets, on the basis of their
economic self-interest
, specialization - correct answer ✔using the resources an individual, firm,
region, or nation to produce one or a few goods or services rather than the
entire range of goods and services
division of labor - correct answer ✔specialization makes use of differences in
ability; specialization fosters learning by doing; specialization saves time
product market - correct answer ✔the place where goods and services
produced by businesses are bought and sold
resource market - correct answer ✔households sell resources to businesses
demand - correct answer ✔schedule or a curve that shows the various
amounts of a product that consumers are willing and able to purchase at each
of a series of posible prices during a specified period of time
law of demand - correct answer ✔price falls, quantity rises; prices rises,
quantity falls; negative or inverse relationship between processes and quantity
demanded
income effect - correct answer ✔a lower price increases the purchasing
power of a buyer's money income, enabling the buyer to purchase more of the
product than before
substitution effect - correct answer ✔a lower price buyers have the incentive
to substitute what is now a less expensive product for other products that are
now relatively more expensive
answers verified to pass
economic system - correct answer ✔a particular set of institutional
arrangements and a coordinating mechanism- to respond to the economizing
problem
laissez faire - correct answer ✔the government's role would be limited to
protecting private property from theft and aggression and establishing a legal
environment in which contracts would be enforced and people could interact
in market to buy and sell goods, services and resources
command system - correct answer ✔government owns most property
resources nd economic decision making is set by a central economic plan
created and enforced by the government; socialism/capitalism
market system - correct answer ✔capitalism/mixed economy
private property - correct answer ✔enables individuals and businesses to
obtain, use, and dispose of property resources they see fit
self-interest - correct answer ✔the motivating force of the various economic
units as they express their free choices
competition - correct answer ✔requires two or more buyers and two or more
sellers acting independently in a particular product or resource market;
freedom of sellers and buyers to enter or leave markets, on the basis of their
economic self-interest
, specialization - correct answer ✔using the resources an individual, firm,
region, or nation to produce one or a few goods or services rather than the
entire range of goods and services
division of labor - correct answer ✔specialization makes use of differences in
ability; specialization fosters learning by doing; specialization saves time
product market - correct answer ✔the place where goods and services
produced by businesses are bought and sold
resource market - correct answer ✔households sell resources to businesses
demand - correct answer ✔schedule or a curve that shows the various
amounts of a product that consumers are willing and able to purchase at each
of a series of posible prices during a specified period of time
law of demand - correct answer ✔price falls, quantity rises; prices rises,
quantity falls; negative or inverse relationship between processes and quantity
demanded
income effect - correct answer ✔a lower price increases the purchasing
power of a buyer's money income, enabling the buyer to purchase more of the
product than before
substitution effect - correct answer ✔a lower price buyers have the incentive
to substitute what is now a less expensive product for other products that are
now relatively more expensive
