Kleshie Baisie Mrs. Foster Economics P.

6 9/1/09

HW# 3, 8-31-09, Chapter 2, sec. 1; p.27 (2-5), and the following terms, 20 points. 1. economic system- the method used by a society to produce and distribute goods and services 2. three key economic questions1) What goods and services should be produced? 2) How should goods and services be produced? 3) Who Consumes goods and services? 3. factor payments are the income people receive for supplying factors of productionland, labor, capital, or entrepreneurship 4. rent, and who receives it for which factor of production?- Landowners 5. wages, and who receives it for which factor of production ?-Workers 6. interest, and who receives it for which factor of production?- Lenders and Banks 7. profits, and who receives it for which factor of production?- Entrepreneurs 8. economic efficiency the maximization of what resources a society can get for the resources they work with. 9. economic freedom- The opportunity to make ones choices concerning the economy. 10. economic security and predictability- Economic Systems reassure people that goods and serviced will be available when they need them and that they can count on receiving expected payments on time. 11. safety net set of government programs that protect people experiencing unfavorable economic conditions. 12. economic equity- Each society must decide the best way to divide its economic pie. Although many people believe in equal pay for equal work, jobs are not valued equally in American Society. 13. standard of living level of economic prosperity

14. traditional economy, and how it would answer the 3 economic questions- Relies on habit custom or ritual to decide what to produce, how to produce it and whom to distribute to. -Work tends to be divided among gender lines - Agricultural and Hunting Communities - Work to support entire groups other than their families 15. market economy, and how it would answer the 3 economic questions- Economic decisions are made by individuals and are based on exchange or trade. These individuals determine what gets made and how as well as who consumes the goods. 16. centrally planned or command economy, and how it would answer the 3 economic questions the central government decides how to answer all three economic questions. 17. mixed economies-Market based economic systems in which government plays a limited role.

Questions

2)

In a Traditional Economy, work tends to be divided among gender lines. These communities are primarily Agricultural and Hunting Communities who work to support entire groups other than their families, In a market Economy however, Economic decisions are made by individuals and are based on exchange or trade. Unlike a Market Economy, a Command Economy is controlled by the central government, and a mixed economy possesses traits from all economies.

3) In society jobs dont share the same value. Ex: Labor intensive positions vs most positions requiring knowledge Work that is more physically taxing and labor-intensive, such as that of a construction worker is often valued below that of a trained professional such as a doctor. 4) Safety Nets provide security for the populace. If a citizen becomes sick or is laid off, they know that the government can assist them.

5) Traditional- Some African tribes Command- USSR, China Market United States