Study Guide
4(HSS) Economics CSA: Unit 1 Test
Vocabulary
1. Good - An item you can see feel and touch that requires scarce resources and satisfies human wants Pg.8
2. Market Economy – Describes the U.S. economic system, where a market plays a relatively large role. (Pg.38)
3. Tradeoffs – The exchange of one thing for another of more or less equal value, especially to effect a compromise.
4.
5. Free Enterprise – an economic and political doctrine holding that a capitalist economy can regulate itself in a freely competitive market through the relationship of supply and demand with a minimum of governmental intervention and regulation.
6. Partnership – Two or more people agree to contribute resources to the business in return for a share of the profit. Pg.(236)
7. Characteristics of Free Enterprise Economy
1. private property
2. freedom of enterprise
3. profit maximization
4. competition
Definition:
Economics – The study of how people use their scarce resources to satisfy their unlimited wants. Pg.(6)
Horizontal Merger – One firm combines with another that produces the same product, such as Exxon and Mobil. Pg. (209)
Entrepreneur – A profit- seeker who develops a new product or process and assumes the risk of profit or loss.pg. (7)
Opportunity Cost – The value of the best alternative passed up for the chosen item or activity.pg. (20) A popular model used to illustrate the concept of opportunity cost is production possibilities frontier.
Matching
Cooperative – An organization consisting of people who pool their resources to buy and sell more efficiently than they could independently. (pg.245)
Conglomerate - A corporation that is made up of a number of different, seemingly unrelated businesses.
Needs - A condition or situation in which something must be supplied in order for a certain condition to be maintained or a desired state to be achieved: crops in need of water; a child's need for affection.
Inflation – An increase in the economy’s general price level. Pg.(398)
Scarcity – A condition facing all societies because there are not enough productive resources to satisfy people’s unlimited wants.