Term
| What are the characteristics of a traditional economy? |
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Definition
| Ritualistic, habitual, based on customs. |
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Term
| what incentive motivates a manufacturer to sell a product? |
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Definition
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Term
| what kinds of decisions can be made at the margin? |
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Definition
| decisions that involve adding one unit or subtracting one unit |
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Term
| what is a critical rule for determining whether something is a public good? |
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Definition
| Benefit to each individual is less than the cost that each would have to pay if it were provided privately, and the total benefits to society are greater than the total cost. |
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Term
| what is the role of government in a free enterprise system? |
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Definition
| inform consumers, protect free enterprise, health, safety, and well being. |
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Term
| What protection does OSHA give to people in the United States? |
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Definition
| Enacts policies to save lives, prevent injuries, and protect the health of workers. |
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Term
| what characterizes an entrepreneur? |
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Definition
| ambitious leadership that combines land, labor, and capital to create and market new goods and services |
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Term
| What effect does new technology usually have on an economy? |
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Definition
| Economies produce more output from the same amount of inputs or resources. This allows the economy to run efficiently, increasing GDP and giving US businesses an advantage. |
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Term
| What makes an economy efficient? |
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Definition
| it's ability to accurately assess what to produce. Knowing the best way to produce a product; it must be able to deliver goods. |
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Term
| What is the benefit provided by social security? |
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Definition
| it provides cash transfers of retirement income to the elderly, and living expenses to disabled Americans. |
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Term
| What are the advantages of a free market? |
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Definition
| economic efficiency, economic freedom, economic growth, and a wider variety of goods and services |
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Term
| What are three key economic questions? |
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Definition
what goods and services should be produced?
how should these goods and services be produced?
who consumes these goods and services? |
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Term
| What are three characteristics of a centrally planned economy? |
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Definition
| central government answers key economic questions, central bureaucracy makes production decisions, consumers do not have sovereignty. |
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Term
| What does the process of specialization do for an economy? |
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Definition
| it leads to efficient use of resources, including capital, land, and labor. |
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Term
| What is the function of an economic system? |
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Definition
| it enables a society to produce and distribute goods and services. |
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