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