Name __________________________
Date _______________
Chapter 2 – Economic Systems and Economic Tools
Vocabulary & Essential Questions
Use the Economics textbook, Mr. Rich’s Power point presentation and the
supplemental readings to complete this worksheet. Reading is fundamental! Please
read before attempting to answer any questions. Always use complete sentences.
VOCABULARY TERMS
Economic System
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Pure Market Economy
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Pure Centrally Planned Economy
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Mixed Economy
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Market Economy
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Transitional Economy
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Traditional Economy
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Production Possibilities Frontier (PPF)
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Efficiency
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Law of Increasing Opportunity Cost
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Economic Growth
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Absolute Advantage
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Law of Comparative Advantage
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Specialization
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Barter
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Money
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Division of Labor
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ESSENTIAL QUESTIONS
1. What are the three questions that all economic systems must answer?
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2. What is a pure market economy and identify its problems.
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3. What is a pure centrally planned economy, and identify its problems?
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4. What are the similarities and differences between a mixed economy, transitional
economy and a traditional economy?
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5. What is the production possibilities frontier and explain its shape.
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6. What causes the production possibilities frontier to shift?
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7. What is the law of comparative advantage and explain?
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8. How can gains be made from specialization and exchange?
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