Question

economics review

• part 1: matching terms to definitions (20 pts)

directions: match each term in column a to its correct definition in column b. write the letter of the correct definition in the blank.
column a

1. ___ command economy
2. ___ market economy
3. ___ mixed economy
4. ___ traditional economy
5. ___ natural resources
6. ___ human capital
7. ___ capital goods
8. ___ entrepreneurship
9. ___ tariff
10. ___ quota
11. ___ embargo
12. ___ currency exchange
13. ___ specialization
14. ___ investment in human capital
15. ___ investment in capital goods

column b
a. an economy based on customs, beliefs, and habits passed down through generations.
b. a government order that stops trade with another country.
c. the workers and their skills, knowledge, and education.
d. a tax placed on imported goods to make them more expensive.
e. a type of economy where the government makes all decisions about what to produce, how to produce it, and for whom.
f. a limit on how many goods can be imported into a country.
g. the process of changing money from one countrys currency to another.
h. when people or countries focus on producing one type of good or service efficiently.
i. spending money or time to educate and train workers.
j. a type of economy where buyers and sellers make decisions based on supply and demand.
k. an economy that combines elements of both command and market systems.
l. tools, machinery, and buildings used to make goods and services.
m. resources that come from nature like water, land, oil, and minerals.
n. spending money to buy new machines, factories, or technology to increase production.
o. the person who starts a business and takes a risk to make a profit.

Explanation:

1. A command economy is where the government makes all production - related decisions, so 1 matches E.
2. A market economy is based on supply and demand decisions by buyers and sellers, so 2 matches J.
3. A mixed economy combines elements of command and market systems, so 3 matches K.
4. A traditional economy is based on customs passed down, so 4 matches A.
5. Natural resources are from nature like water and land, so 5 matches M.
6. Human capital is workers and their skills, so 6 matches C.
7. Capital goods are tools and machinery for production, so 7 matches L.
8. Entrepreneurship is about starting a business and taking risks, so 8 matches O.
9. A tariff is a tax on imported goods, so 9 matches D.
10. A quota is a limit on imported goods, so 10 matches F.
11. An embargo stops trade with another country, so 11 matches B.
12. Currency exchange is changing one currency to another, so 12 matches G.
13. Specialization is focusing on producing one good/service efficiently, so 13 matches H.
14. Investment in human capital is spending on worker education/training, so 14 matches I.
15. Investment in capital goods is spending on new machines etc. for production, so 15 matches N.

Answer:

1. E
2. J
3. K
4. A
5. M
6. C
7. L
8. O
9. D
10. F
11. B
12. G
13. H
14. I
15. N