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Definition
| Legislative branch — Congress (Senate and House). |
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Term
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Definition
| Executive branch — President, Cabinet, federal agencies. |
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Term
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Definition
| Judicial branch — courts and the Supreme Court. |
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Term
| What did Montesquieu argue? |
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Definition
| Separation of powers so no one branch of government becomes too strong. |
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Term
| How does the Electoral College work? |
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Definition
| Each state gets electors equal to its House seats plus Senate seats. That formally elects the U.S. president. |
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Term
| Explicit powers vs implied powers |
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Definition
| Explicit (enumerated) powers are written in the Constitution. Implied powers are inferred as needed to carry out explicit powers (Necessary and Proper Clause). |
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Term
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Definition
| Upper house; 2 senators per state. Confirms appointments and treaties (advice and consent). |
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Term
| What does the House of Representatives do? |
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Definition
| Lower house; representation based on population. Starts revenue bills. |
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Term
| Q1: Why is maximizing rational even if it makes us act in bad ways? |
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Definition
| Rational means consistent goal-seeking with scarce means, not morally good. People maximize their own utility given constraints. Economics describes the behavior; it does not approve it. Incentives still matter. |
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Term
| Q2: How do we analyze something in a scientific way? |
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Definition
| Use positive analysis: state a claim that can be tested, look at evidence, separate facts from values. Build a model, hold some things constant, compare predictions with data. Normative should-statements come after the facts. |
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Term
| Q3: How did people before Smith see the world? Why free markets? |
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Definition
| Mercantilists treated wealth as gold and favored government-managed trade. Smith treated wealth as real goods and productivity. Self-interest plus competition channels people into serving others: the invisible hand. |
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Term
| Q4: Why is competition essential to Smith's theory? |
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Definition
| Without competition, self-interest becomes monopoly power. Competition disciplines sellers, pushes prices toward natural price/cost, and forces producers to innovate and please buyers. |
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Term
| Q5: Capitalism vs socialism? Marx? Modern view? |
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Definition
| Capitalism: private property, markets, prices, profit and loss. Socialism: state/community ownership and planning. Marx: capitalism exploits labor and will collapse. Modern economists: markets usually grow more; command systems faced shortages and weak innovation. |
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Term
| Q6: Why do most economists like capitalism? Concerns? |
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Definition
| Markets allocate with prices, reward productivity, and raise average living standards. Concerns: monopoly, inequality, externalities, asymmetric information, moral hazard, instability, underprovision of public goods. |
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Term
| Q7: Will public goods work if left to the market? |
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Definition
| No. Public goods are non-excludable and non-rivalrous, so people free ride. Too little is produced. Government provision or funding is the usual fix. |
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Term
| Q8: Smith's view of government? Modern debates? |
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Definition
| Smith: limited government — justice/rule of law, national defense, some public works. Modern debates add externalities, public goods, macro stability, redistribution, health/education, and how far general welfare should go. |
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Term
| Memory hook: scarcity chain |
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Definition
| Scarcity → choices → opportunity cost → think at the margin (MB vs MC). |
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Term
| Memory hook: public goods |
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Definition
| Public good = non-excludable + non-rivalrous → free riders. |
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Term
| Memory hook: capitalism vs socialism |
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Definition
| Capitalism = private property + markets. Socialism/command = state planning. |
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Term
| Memory hook: Smith + government |
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Definition
| Smith: self-interest + competition = invisible hand. Government: defense, justice, some public works. |
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