7/23/2019 Economics Quiz 1

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Economics

Traditional Economy production decisions are made according to

customs and traditionsCommand System The system that works under the principle that

the interest of society should prevail over that ofthe individual

Market System The market prices serve as signals to the

producers about what goods to produce and how

much of these goods should be producedMixed System The economic problems are answered

predominantly through the price mechanism and

modied through government interventionMarket System An economy where individuals exercise free

enterpriseHousehold Basic consuming unit

Land It includes water, forest, and animalsLabor an!s mental and physical e"orts exerted in

productionCapital achines, tools, e#uipment used in productionEntrepreneur Brains behind the business

Capital Inputs used in productionInterest $rice of capitalWages $ayment made to laborRent $ayment made to use of landMacroeconomics %ational income analysisositi!e Economics &tudy of what is

Microeconomics &tudy of price theory"ormati!e Economics 'eals what should beWants desires and needs of consumers that needs to be

satised#asic "eeds an!s needs re#uired for survival