1.
2.
3.
4.
Define economic system.
List and describe the Three Key Economic Questions.
List and describe the four types of economic systems.
Using the Chart Below, describe each of the Economic Goals and Societal Values.
Then provide a real-life example of each.
Economic Goal and
Societal Values
1.
2.
3.
4.
5.
6.
Economic Efficiency
Economic Freedom
Economic Security
and Predictability
Economic Equity
Economic Growth and
Innovation
Additional Goals
Summary
Example
Economic System

Economic System – method used by society to produce
goods and services
Four Economic Questions




What and how much should be produced?
Who should produce it?
How should it be produced?
Who should share in its use?
Four Economic Systems
1.
2.
3.
4.
Traditional economy – relies on habit, custom, or ritual to decided the 3
economic questions
Market economy – economic decisions are made by individuals and are
based on exchange, or trade.
Command Economies – in a centrally planned economy, the central
government alone decides how to answer the three economic
questions.
Mixed Economies – market-based economic systems in which
government plays a limited role.
Economic Goal and
Societal Values
1.
Economic Efficiency
2.
Economic Freedom
3.
Economic Security
and Predictability
4.
Economic Equity
5.
Economic Growth
and Innovation
6.
Additional Goals
Summary
Making the most of scarce
resources
Freedom from government
intervention in the production
and distribution of
goods/services
Knowing that goods and services
will be available, payments made on
time, government will provide a
safety net in times of economic
downturns
Fairness, being paid according to
your skill level, not being
discriminated against
Example
Manufacturer knowing the
best way to use resources
wisely (Assembly Line)
Working where you want,
spending money the way that
you want, owning a
business, etc.
Security – Unemployment
Checks, Social Security
Predictability – gas at gas
pumps, food at store
Lawyers earn more than
nurses, computer programmers
more than truck drivers
Economic growth refers to
improving standard of living and
GDP. Innovation, improving existing
technology.
Agricultural age to industrial
age to information age.
Innovations in computers,
communication.
Future goal for society.
Environmental protection, full
employment, universal medical
care.
Statements
1.
2.
3.
4.
5.
6.
7.
8.
Last week I willingly enrolled in
college courses at Coastal. I am so
happy that I make my decisions about
my future.
My uncle lost his job, but thankfully he
is able to receive unemployment
checks.
Wal-Mart recently upgraded all of their
registers to touch screen monitors.
General Motors replaced all of their
human workers with robots in order to
increase productivity.
As a result of the internet and
technology, our economy has
experienced significant expansion over
the past 30 years.
I can always expect Publix to have the
food I like!
Hopefully in the future we will have
full employment.
With every degree/skill I earn, I
improve my ability to make money.
Economic Goal
1. Economic Freedom
2. Economic Security
3. Economic Innovation
(Efficiency)
4. Economic Efficiency
(Innovation)
5. Economic Growth
(Innovation)
6. Economic Predictability
7. Additional (Future)
Goals (Equity)
8. Economic Equity
(Growth)
Poster Requirements:
1. Title - Economic Goals and
Societal Values
2. Summary Statement – “The
Economic Goals and Societal Values
provide a basic framework for each
society and their attempts to
provide for their people.”
3. 8 pictures to represent each of the
economic and social goals.
4. Label, describe and summarize each
picture
1.
2.
3.
4.
5.
6.
7.
8.
Economic Efficiency
Economic Freedom
Economic Security
Economic Predictability
Economic Equity
Economic Growth
Economic Innovation
Additional Goals
Economic Efficiency
Description: Using the factors of production in the most
productive way possible, as to maximize profit
Picture Summary: This picture represents assembly
line production at an automobile manufacturing plant.
This shows how the division of labor and specialization
can increase efficiency.
Economic Goals and Societal Values
Summary Statement:
The Economic Goals and
Societal Values provide a basic
framework for each society and
their attempts to provide for
their people.
Economic Efficiency
Definition: societies try to maximize
the factors of production
Picture:This picture represents an
efficient use of resources through
assembly line production
Economic Predictability
Economic Innovation
Economic Freedom
Economic Security
Economic Growth
Economic Equity
Additional Goals
Poster Requirements:
1. Title - Economic Goals and Societal Values
2. Summary Statement – Purpose of economic and Societal Values
3. At least 8 pictures to represent each of the Economic Goals and Social Values
4. Label, definition and picture description for each of the 8 Economic Goals and Societal Values

Bead Game Simulation
Chapter 2 Section 1 – Daily Assignment Questions pgs. 26 -27
1.
2.
3.
4.
5.
6.
7.
8.
How does a traditional economy
answer the three economic questions?
Describe traditional economies and
their communities.
What is a disadvantage to a traditional
economy?
How are the three economic questions
answered in a market economy?
What are other names for market
economies?
How are the three economic questions
answered in a command economy?
Why are they referred to as command
economies?
Why are most modern economies
referred to as mixed economies?

Imagine that you are walking into Walmart. List 3
items that you could purchase and the
departments that you would find them in.
Chapter 2 Section 2 – The Free Market




Market – buyers and sellers meet to exchange goods and services
Market Economy – economic decisions(what to produce, how to produce, for
whom to produce) are made by consumers and businesses based on
exchange of goods and services
Capitalism (free market) – Individuals and businesses own the factors of
production and can profit on them
Voluntary Exchange - is the act of buyers and sellers freely and willingly
engaging in market transactions
 Specialization – the separation of tasks within a system;
people focus on a specific purpose/task
 Division of Labor – Workers perform fewer tasks in
order to operate more efficiently
Households and Firms


Household – Person or group of people living in a residence
 Consumers - use the goods and services (outputs) to satisfy
wants and needs
Firm – business, organization that uses resources to produce a
product, which it then sells
 Suppliers – transform “inputs” (F.O.P.) into “outputs” (products)
Product Markets

Product Markets – Houses and firms interact; producers sell
their goods and services to consumers
 Households are buyers of goods and services
 Firms are sellers of goods and services (outputs)
Factor Markets

Factor Markets – the markets where productive resources
(F.O.P)/Inputs are bought and sold
 Labor - Firms (businesses) hire workers and pay them salaries
 Land - Purchased/rented land
 Capital - Use money from households, purchase capital goods
Circular Flow Model of Economic Activity – shows the flow of money and goods/services
from and to businesses and households
Consumer Spending
Product
Product
Market
Market
Business Income/Revenue
•Market for Goods
and Services
•Firms sell
Households Buy
Consumer Goods and Services
Final Goods and Services
Sold
Households
Households
Firms
Firms
(Business)
• Buy and Consume
Goods and Services
•Own and sell
the F.O.P
• Produce and sell
Goods and Services
•Hire and use F.O.P.
Land, Labor, Capital - provided by
household
Inputs for Production (F.O.P.)
Factor
Market
Income to Households/Individuals
Market for F.O.P
•Households sell
•Firms buy
Payment for F.O.P. – Rent (Land) Wages
(Labor), Interest (Capital),
Profit (Entrepreneurs)
Application Questions
1.
2.
3.
4.
In the factor market, what do businesses provide households? Income/payment the F.O.P
The flow of goods and services in the product market is represented by which firm and
products on the model below? Starbucks/Coffee
When you apply for a job at the local Starbucks which market are you in? Factor
Which color arrows represent the flow of money; what color arrows represent the flow of
inputs and outputs.
Blue/Tan
Circular Flow Model of Economic Activity
Consumer Spending/Investing
Business Income/Revenue
Product
Market
Goods and Services
Purchased:
Caramel Frappuccino
Goods and Services Sold
Firms
Households
Land, Labor, Capital,
Entrepreneurs
Inputs for
Production
(F.O.P.)
Factor
Market
Income to Households/Individuals
Payment for F.O.P. –
Wages, rent,
capital goods
Daily Assignment - Circular Flow Model of Economic Activity
Consumer Spending
Business Income
1. _________________________
1. _________________________
Product
Market
Goods Purchased
Goods Offered
1. ___________________________
1. ______________________________
2. ___________________________
2. _______________________________
Firm
Household
1. ________________________
Firm 1. _____________________________
Firm 2. _____________________________
Input for Production
Factor of Production Offered
1. ___________________________
1. ___________________________
Weekly Income
1. __________________
Factor
Market
Payments for F.O.P
1. _________________
Vince Lombardi “What it Takes To Be Number 1”
"Winning is not a sometime thing; it's an all the
time thing. You don't win once in a while; you
don't do things right once in a while; you do
them right all the time. Winning is a habit.
Unfortunately, so is losing. There is no room for
second place. There is only one place in my
game, and that's first place. I have finished
second twice in my time at Green Bay, and I
don't ever want to finish second again. There is
a second place bowl game, but it is a game for
losers played by losers. It is and always has
been an American zeal to be first in anything
we do, and to win, and to win, and to win.
Every time a football player goes to play his
trade he's got to play from the ground up-from
the soles of his feet right up to his head. Every
inch of him has to play. Some guys play with
their heads. That's O.K. You've got to be smart
to be number one in any business. But more
importantly, you've got to play with your heart,
with every fiber of your body. If you're lucky
enough to find a guy with a lot of head and a
lot of heart, he's never going to come off the
field second.
Vince Lombardi “What it Takes To Be Number 1”
Running a football team is no different than
running any other kind of organization-an army, a
political party or a business. The principles are the
same. The object is to win-to beat the other guy.
Maybe that sounds hard or cruel. I don't think it is.
It is a reality of life that men are competitive and
the most competitive games draw the most
competitive men. That's why they are there-to
compete. To know the rules and objectives when
they get in the game. The object is to win fairly,
squarely, by the rules-but to win. And in truth, I've
never known a man worth his salt who in the long
run, deep down in his heart, didn't appreciate the
grind, the discipline. There is something in good
men that really yearns for discipline and the harsh
reality of head to head combat. I don't say these
things because I believe in the "brute" nature of
man or that men must be brutalized to be
combative. I believe in God, and I believe in
human decency. But I firmly believe that any
man's finest hour, the greatest fulfillment of all that
he holds dear, is that moment when he has
worked his heart out in a good cause and lies
exhausted on the field of battle - victorious."
...Vince Lombardi
1.
2.
3.
4.
Do you agree with Vincent
Lombardi’s assertion that
people are born with the
desire to compete why or
why not?
What areas do you see
competition in the
economy of the United
States ?
How is competition
beneficial to our
economy/society?
How is it harmful to our
economy/society?


Competition – efforts among sellers/producers to
attract consumers at various prices
 At the heart of market economic philosophy
Incentive – an expectation that encourages people to
behave in a certain way (positive and negative)
 Businesses respond to profits
 Consumers respond to price change (high/low)
Chapter 2 Section 2 – Daily Assignment
Economic Profile Adam Smith pgs. 33
1.
2.
3.
4.
5.
6.
7.
8.
What was Adam Smith’s ethnic and
professional background?
What was the name of the book that
he published; when was it published?
What did Smith identify in the book?
What did he assert about
specialization and division of labor?
What did he believe about the role of
government in the economy?
Define the French term Laissez Faire;
why did Smith believe in LaissezFaire economics?
What is meant by his metaphor of the
Invisible Hand?
How do both consumers and
businesses benefit from this
philosophy?
Economics Daily Ten #2
- Fill in the blanks for each of the following:
1.
QB Peyton Manning’s high salary, vs. a cashier’s low
equity _________.
salary, represents economic
2.
Moving from the personal computer to handheld
innovation_________.
devices represents an economic
3.
“Today, I know Chevron will have gas” represents
economic ___________.
predictability
4.
GM receiving a government bailout represents economic
security
____________.
5.
Increasing the production of goods, services and jobs
growth ________.
would represent economic
Word Bank: innovation, predictability, growth, security,
equity.
Chapter 2 Section 3 – Centrally Planned Economies


Command – central authority owns and operates the Factors of Production
Centrally Planned Economy – central government answers the three
economic questions; WHAT to produce, HOW to produce, and FOR
WHOM to produce
 Oppose private property, free market pricing, economic freedom
Socialism and Communism




Karl Marx – German social philosopher that studied economic systems in Europe

Communist Manifesto – written by Marx and Frederick Engels became basis for
modern-day command economies

Thought capitalism would fail because it put to much wealth in the hands of few and
left everyone else poor

Believed in a “no-class” system, where all share in wealth/power
Socialism – distribution of wealth and F.O.P. equally amongst society
Communism – political and economic system with centralized economic decision-making
Authoritarian Government – exact strict obedience from their citizens; do not allow
individual freedom
1. Why does a free market economy need some government
intervention?
a. so that the government has total control over factor resources
b. to ensure the government has the freedom to tax as necessary
c. to make sure that the government can fulfill its needs for goods
and services
d. to provide for things that the marketplace does not address (i.e.
market failures)
Explanation: (d) – most modern economies are mixed, or have some government
involvement to regulate, protect and oversee.
2. In what kind of economy does the government make all the
decisions?
a. socialist
b. laissez faire
c. centrally planned, or command economy
d. free enterprise
Explanation: (c) – command economies are controlled by a dictator, or small group
of economic policy makers.
Chapter 2 Section 3 – Daily Assignment Questions
“The Former Soviet Union” pgs. 36-38
How did the Soviet Union arise?
2.
Where did Soviet planners allocate the factors
of production?
3.
How did the Soviet Union control agriculture?
4.
What three industries did Soviet Planners
favor?
5.
How did the Soviet Union view entrepreneurial
endeavors?
6.
What was the quote used by Soviet consumers
as a joke?
7.
Why were Soviet Consumers’ left unsatisfied?
Page 39 – Russia in Crisis
1.
How did many Russians initially respond to the
Communist collapse?
2.
What happened over the next decade?
3.
How did Russia deal with corruption?
4.
What were some characteristics of Russia’s
financial problems?
5.
What evidence can be seen that success is in
sight?
1.
Scenario 1
You have two cows.
You trade one to your neighbour for a bull.
You only produce what you need to survive.

Scenario 2
You have two cows.
The State takes both and gives you just enough
milk to live

Scenario 3
You have two cows.
You sell one and buy a bull.
Your herd multiplies, and your wealth grows.
You sell your herd and retire on the income.

1.
2.
3.
4.
What economic system matches each
scenario?
Which scenario do you think is the most
ideal and why?
Which scenario do you think sounds the
most like the United States? Why?
What countries do you know of that could
fall into scenario 2.
Chapter 2 Section 4 – Modern Economies


Free Enterprise – competition in the marketplace is allowed to flourish
with no interference from government
Modified Free Enterprise (mixed economy) – businesses are free to
compete with some government regulation/intervention
Centrally Planned
Free Market
Mexico
North Korea
France
Hong Kong
Iran
South Africa
Cuba
United Kingdom
Canada
China
Poland
Japan
United States
Singapore
Laissez Faire in a Modern Economy


Laissez Faire – no government intervention in the economy
Some government intervention is necessary in the economy; some needs
are difficult to answer in the marketplace
 National defense, roads and highways, education, etc…
 Government acts a protector, regulator and overseer of economy
Government Money

Taxes from both households and businesses
 Income, state, social security, Medicare/Medicaid, unemployment
insurance, etc.
Government in the Factor Market


Government purchases land, labor, and capital from households
United States gov’t pays 2.8 million employees $9.7 billion for labor
Government in the Product Market

Government purchases goods and services from firms (businesses)
 Buildings, office supplies, telephones, computers, etc.
Economic Goals
Economic Efficiency
Economic Freedom
Economic Security
Economic Predictability
Economic Equity
Economic Growth
Economic Innovation
Market
Yes - High levels of economic
freedom
Command
No - Many aspects of economic
activity are tightly controlled and
state-dominated
Tradition
No - Extremely limited, a person’s
role in society is based on custom,
heritage and tradition
Using the Chart Below, identify how each of the economic goals are addressed.
Economic
Goals
Market Economy
Economic
Freedom
Yes - High levels of
economic freedom
Economic
Efficiency
Economic
Security
Economic
Predictability
Economic Equity
Economic
Growth
Economic
Innovation
Command Economy
Traditional Economy
No - Many aspects of economic
No - Extremely limited, a person’s
activity are tightly controlled and role in society is based on custom,
state-dominated
heritage and tradition
Using the Chart Below, identify how each of the economic goals are addressed.
Economic Goals
Economic
Efficiency
Market
Highly stressed because of
scarcity and competition
Economic Freedom High levels of economic
freedom
Economic Security
Economic
Predictability
Economic Equity
Economic Growth
Economic
Innovation
Command
Tradition
Lack of profit motive can
lead to a lack of efficiency
Slow to adapt to new
ideas/technology. Inefficient by
standards of modern societies
Many aspects of economic
activity are tightly controlled
and state-dominated
Extremely limited, a person’s role in
society is based on custom, heritage
and tradition
Using the Chart Below, identify how each of the economic goals are addressed.
Economic Goals
Economic
Efficiency
Market
Highly stressed because of
scarcity and competition
Command
Tradition
Lack of profit motive can
lead to a lack of efficiency
Slow to adapt to new
ideas/technology. Inefficient by
standards of modern societies
Economic Freedom High levels of economic
Many aspects of economic
activity are tightly controlled
and state-dominated
Extremely limited, a person’s role in
society is based on custom, heritage
and tradition
Economic Security
Economic security is assured
based on full employment
and government sponsored
programs
Economic security is assured based on
traditional means of production
freedom
Economic
Predictability
Economic Equity
Economic Growth
Economic
Innovation
Safeguards In society, but
general employment is not
assured
Using the Chart Below, identify how each of the economic goals are addressed.
Economic Goals
Economic
Efficiency
Market
Highly stressed because of
scarcity and competition
Command
Tradition
Lack of profit motive can
lead to a lack of efficiency
Slow to adapt to new
ideas/technology. Inefficient by
standards of modern societies
Economic Freedom High levels of economic
Many aspects of economic
activity are tightly controlled
and state-dominated
Extremely limited, a person’s role in
society is based on custom, heritage
and tradition
Economic Security
Safeguards In society, but
general employment is not
assured
Economic security is assured
based on full employment
and government sponsored
programs
Economic security is assured based on
traditional means of production
Economic
Predictability
High predictability
Lack predictability because
government controls F.O.P.
Predictable in most cases. Can be
unpredictable, because F.O.P. are
controlled through traditional means
freedom
Economic Equity
Economic Growth
Economic
Innovation
Using the Chart Below, identify how each of the economic goals are addressed.
Economic Goals
Economic
Efficiency
Market
Highly stressed because of
scarcity and competition
Command
Tradition
Lack of profit motive can
lead to a lack of efficiency
Slow to adapt to new
ideas/technology. Inefficient by
standards of modern societies
Economic Freedom High levels of economic
Many aspects of economic
activity are tightly controlled
and state-dominated
Extremely limited, a person’s role in
society is based on custom, heritage
and tradition
Economic Security
Safeguards In society, but
general employment is not
assured
Economic security is assured
based on full employment
and government sponsored
programs
Economic security is assured based on
traditional means of production
Economic
Predictability
High predictability
Lack predictability because
government controls F.O.P.
Predictable in most cases. Can be
unpredictable, because F.O.P. are
controlled through traditional means
Economic Equity
Fairness (hiring and
payment) is a primary goal of
a market economy
Lack of equitable payments
based on the production of
goods and services
Equity is based on customary means
of production, women have assigned
roles, men have assigned roles
freedom
Economic Growth
Economic
Innovation
Using the Chart Below, identify how each of the economic goals are addressed.
Economic Goals
Economic
Efficiency
Market
Highly stressed because of
scarcity and competition
Command
Tradition
Lack of profit motive can
lead to a lack of efficiency
Slow to adapt to new
ideas/technology. Inefficient by
standards of modern societies
Economic Freedom High levels of economic
Many aspects of economic
activity are tightly controlled
and state-dominated
Extremely limited, a person’s role in
society is based on custom, heritage
and tradition
Economic Security
Safeguards In society, but
general employment is not
assured
Economic security is assured
based on full employment
and government sponsored
programs
Economic security is assured based on
traditional means of production
Economic
Predictability
High predictability
Lack predictability because
government controls F.O.P.
Predictable in most cases. Can be
unpredictable, because F.O.P. are
controlled through traditional means
Economic Equity
Fairness (hiring and
payment) is a primary goal of
a market economy
Lack of equitable payments
based on the production of
goods and services
Equity is based on customary means
of production, women have assigned
roles, men have assigned roles
Economic Growth
Grow at a fast rate due to
competition and profit motive
Lack of growth because of a
lack of efficiency and profit
motive
Lack of growth due to a lack of
productivity and innovation
freedom
Economic
Innovation
Using the Chart Below, identify how each of the economic goals are addressed.
Economic Goals
Economic
Efficiency
Market
Highly stressed because of
scarcity and competition
Command
Tradition
Lack of profit motive can
lead to a lack of efficiency
Slow to adapt to new
ideas/technology. Inefficient by
standards of modern societies
Economic Freedom High levels of economic
Many aspects of economic
activity are tightly controlled
and state-dominated
Extremely limited, a person’s role in
society is based on custom, heritage
and tradition
Economic Security
Safeguards In society, but
general employment is not
assured
Economic security is assured
based on full employment
and government sponsored
programs
Economic security is assured based on
traditional means of production
Economic
Predictability
High predictability
Lack predictability because
government controls F.O.P.
Predictable in most cases. Can be
unpredictable, because F.O.P. are
controlled through traditional means
Economic Equity
Fairness (hiring and
payment) is a primary goal of
a market economy
Lack of equitable payments
based on the production of
goods and services
Equity is based on customary means
of production, women have assigned
roles, men have assigned roles
Economic Growth
Grow at a fast rate due to
competition and profit motive
Lack of growth because of a
lack of efficiency and profit
motive
Lack of growth due to a lack of
productivity and innovation
Economic
Innovation
Innovation is at a high rate
due to changes in the
marketplace and competition
Less incentive to innovate
because profits and credit go
to the state
Innovation is non-existent by modern
standards
freedom
Disadvantages
Advantages
Examples
Tradition
Command
Market
1.
1.
2.
2.
3.
3.
1.
1.
2.
2.
1.
1.
1.
2.
2.
2.
3.
3.
4.
4.
5.
1.
2.
3.
4.
5.
6.
7.
8.
9.
1.
2.
3.
4.
5.
6.
Chapter 2 – VIS Terms
1. Traditional Economy
15. Socialism
2. Command Economy
16. Communism
3. Market Economy
17. Authoritarian
4. Market
18. Laissez-Faire
5. Free Market
6. Specialization
7. Division of Labor
8. Household
9. Consumer
10. Firm
11. Supplier
12. Product Market
13. Factor Market
14. Centrally Planned
Economy
Junk!!!
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
DAQ's pg. 26-27, Ch. 2 Sec. 1
Video Questions - North Korea
Comparing Economic Systems,
Advantages + Disadvantages Economic
Systems + Reflection Questions
D.A. Circular Flow Model
Circular Flow (Elisa and Marcella)
Online Assignment - Scarcity
Ch. 2 Sec. 2 D.A. Adam Smith
Ch. 2 Sec. 3 D.A. "The Former Soviet
Union"
Economic Goals and Am. Free
Enterprise Flow Chart
Chapter 2/3 Study Guide
Ch. 2 CW Puzzle
Ch. 3 CW Puzzle
Ch. 2 Notes
Daily Tens (12)
Vocab Terms
Junk!!!
Circular Flow Model of a Mixed Economy
Consumer Spending/Investing
Business Income/Revenue
Product
Market
Goods and Services
Sold
Goods and
Services
Purchased:
Households
Expenditures
Expenditures
Land, Labor,
Capital,
Entrepreneur
Income to Households/Individuals
Firms
Inputs for
Production
(F.O.P.)
Factor
Market
Payment for F.O.P. –
Wages, rent,
capital goods
26. EF3b: From the principle of voluntary exchange, we
conclude that:
a. often buyers are made better off at the expense of sellers
b. often sellers are made better off at the expense of buyers
c. both the buyer and the seller must be better off as a result
of a transaction
d. neither the buyer nor the seller are necessarily made
better off as a result of a transaction
27. EF3b: The concept that people may decide what and when
they want to buy and sell
a. voluntary exchange
b. fraudulent exchange
c. competition
d. economic integrity
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Economic System
What to produce, Who to produce them for,
How to produce them
Economic: efficiency, freedom, security,
predictability, equity, growth, innovation,
additional goals
Tradition, custom, ritual, habit
Central planners dictate the what, how, for
whom
Households and firms through production
and consumption
Market
Market economy
Capitalism
Households and Firms
Input is something used to produce and
output, which is a final good or service
Product
Factor
Adam Smith, Wealth of Nations
15.
16.
17.
18.
Be limited in its role in the economy, “Let
them do as they please”.
Invisible Hand
See Circular Flow
a) Product
b)
c)
d)
e)
19.
20.
21.
22.
23.
24.
25.
26.
27.
when it changed hands from the household to the
firm
Factor, labor
Grills, hostesses, cashiers
Factor
Karl Marx, Communist Manifesto
That it would fail because it put too much
money in the hands of the rich and not in the
hands of the poor
Communism, Socialism
Authoritarian
Economic Freedom
Property Rights
Profit Motive
Voluntary Exchange
Competition
28.
29.
30.
31.
32.
33.
34.
35.
36.
Their purchases signal to producers
what to produce (consumer
sovereignty)
Overseer, protector, regulator,
informer
Technology
Public Good
Public
Private
Free Rider
Market Failure
Externality
Extra Credit
1. Give an example of
specialization/division of labor, and
explain why it is beneficial.
2. Give an example of a positive and
negative externality not mentioned on
the test.
3. Explain why the United States is not a
true “pure market/free enterprise”
system.