Details Title: american heritage Description: appendix A Total Flash Cards: 39 Created: 07/02/2009 16:01:50		New Users: To study from this flashcard set, or to create your own your own study flash cards, REGISTER HERE. Existing Users: CLICK HERE. Additional Political Studies Flashcards
Cards in this set: Term two things that evry society wants Definition an efficient economic system. a fair economic system Term 3 primary goals of our economic system Definition efficiency, equity, freedom Term efficiency Definition produce the most goods for most peopl Term equity Definition distribute goods and rewards fairly Term freedom Definition keep liberty of people Term economic system Definition structure for making and distributing goods and services Term exchange Definition when two parties agree on a certain trade. both benefit. Term assumption that anarchy makes Definition other people under anarchy dont destroy us first Term the aspect in our lives we are most dominated by Definition economic behavior Term how can we get all we want out of the market economy Definition by appealing to "self-love" Term command system Definition allocation of resources are heavily controlled by gov. instead of free markets Term efficient economy Definition where all benefits are maximized that one party can't increase their benefits without decrease the benefits of others Term what is another thing we must assume about human nature for the market to work well? Definition that people are rational in their economic decisions Term scarcity Definition not enough resources, time, money, etc. to fill all the wants of everyone Term opportunity cost Definition the value of the best alternative not chosen Term law of comparative advantage Definition producers specialize in the productin of goods where they have the lowest opportunity cost Term one of the principles of free exchange Definition specialization Term opportunity cost. another approach at it Definition defined bgy available alternatives rather than by absolute levels of skill and abilities. Term law of comparative adavantage. another approach Definition there is always someone who can perform at a lower cost Term full employment of resources Definition everyone is the low cost producer of something. Term mediocricy of "law of comparative advnatage" Definition the best people for teh job are only rarely doing the actual work because of specialization Term widest possible gains from exchange Definition this is because everyone specializes and makes a lot of profit for each little department there is Term what distinguishes a modern country to a primitive one? Definition the use of specialization, it increases production power of an economy Term economic interdependence Definition trade links nearly every individual in teh U.S. economy Term the role of economic competition Definition it forces the competitors to develop new products constantly Term perfect competition Definition when buyers and sellers ahve no influence on price and terms of exchange Term two things that competition achieves Definition helps economy find exchanges that will be beneficial. and it disperses the gains from exchange more widely Term two things that will help us make the right set of exchanges Definition opportunity cost and law of comparative advantage Term what determines opportunity costs? Definition prices of goods , services, and wages Term a market economy is particularly adept in... Definition generating right set of prices Term four economic principles that help us understand how prices are dteremined Definition demand, supply, equilibrium price, role of profits Term law of demand Definition as the price goes up, people will buy less Term example of law of demand Definition embargo on export oil by OPEC nations Term law of supply Definition as price goes up, industries will make more of that product and sell it for less Term goal of economy Definition efficiency Term role of profits Definition as profits increase, number of suppliers and resources for making tha good will increase Term two thigns that dictate whether a business should move or not Definition profit and losses Term role of prices Definition prices determine the quantity of goods supplied Term role of gov. in a market economy Definition prevent fraud, provide money, transportation, define property rights, enforce teh exchange of agreements