Economic Survey
Mr. Rubin de Celis
Chapter 3 vocabulary review
3.1
1. Giving consumers the freedom to make their own economic choices is the fundamental purpose of

a centrally planned economy.

the free enterprise system.
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consumerism.

socialism.
2. Open opportunity is the

concept that everyone can compete in the marketplace.
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concept of giving everyone the same legal rights.
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rivalry among sellers to attract customers while lowering costs.
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concept that people have the right to do as they wish with their possessions.
3. The concept that people may decide what and when they want to buy and sell is

competition.
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public interest.
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voluntary exchange.
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legal equality.
4. Complete the sentence to make a true statement. Competition

creates artificially high prices for products and services.
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allows most businesses to make a profit.
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slows down innovation in the marketplace.
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means consumers have more economic choices.
5. Laws requiring companies to provide full information about their products are called

legal equality laws.
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free contract laws.

open opportunity laws.
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public disclosure laws.
6. Which of the following is a negative effect of government regulation?

Government regulations can be costly for businesses to implement and may cut into profits.

Government regulations can protect consumers' health.

Government regulations define air traffic control and piloting standards.

Government regulations recognize the rights of disabled individuals.
7. A key reason for public disclosure laws is to
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protect consumers.
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promote a positive business climate.
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clean up the environment.

add dollars to state budgets.
8. The force that encourages people and organizations to improve their material well-being is known as

a legal equality.

profit motive.

public interest.

pubic disclosure.
9. Free contract is the

concept that people may decide what agreements they want to enter into.

rivalry among sellers to attract customers while lowering costs.

concept that individuals should not have to pay anything to enter into a contract.

concept of giving everyone the same legal rights.
10. American free enterprise is driven by the

desire for economic equality.

need to make a living.

desire for profit.

need to own a home.
3.2
1. Why are patents and copyrights important?

They protect consumers from buying faulty products.
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They provide a way for inventors to get their inventions manufactured.

They provide inventors the possibility of making profits.

They encourage businesses to sell copies of new products.
2. How do patents and copyrights encourage innovation?

They grant companies the right to copy the inventions and creative works of individuals at
little or no cost.

They prevent inventors, writers, and other creative people from making huge profits, thus
keeping prices low for consumers.

They limit the number of inventions a single individual or business may patent or copyright,
so more people have the opportunity to invent things.

They give inventors and writers exclusive rights to produce and sell their inventions and
works, possibly making large profits.
3. Macroeconomics is

the study of the economic behavior and decision making of small units, such as individuals,
families, and businesses.

the study of the behavior and decision making of entire economies.

the concept that everyone can compete in the marketplace.

a commitment to the value of work and purposeful activity.
4. What is one way the federal government does NOT help stabilize the economy?

It influences interest rates.

It fixes prices for products.

It provides jobs.

It promotes steady growth.
5. The process used to produce a good or service, such as using a robotic device to assemble cars, is

technology.

the profit motive.

open opportunity.

the gross domestic product.
6. Work ethic is

a period of macroeconomic expansion followed by a period of contraction.

a commitment to the value of work and purposeful activity.

the study of the behavior and decision-making of different economic systems.

the study of the economic behavior and decision making of small units, such as individuals,
families, and businesses.
7. How does a country such as the United States increase its productivity?

through a strong work ethic and the use of technology

by lowering wages and lengthening the workday

through regulations that limit innovation

by raising wages and shortening the workday
8. Why is the free enterprise system subject to business cycles?

because of minor fluctuations like the day-to-day fluctuations of the stock market

because the government plays a role in making decisions about factors such as prices,
production, and consumption.

because individuals and businesses acting in their own self-interest make economic decisions
about factors such as prices, production, and consumption.

because for each generation, the American Dream of a higher standard of living than their
parents' generation becomes harder to reach.
9. The total value of all final goods and services produced in a particular economy is called

the work ethic.

microeconomics.

macroeconomics.

the gross domestic product.
10. The business cycle is

the study of the economic behavior and decision making of small units, such as individuals,
families, and businesses.

the study of the behavior and decision making of entire economies.

a commitment to the value of work and purposeful activity.

a period of macroeconomic expansion followed by a period of contraction.