Economics Ch 2 Sec 2

¡Supera tus tareas y exámenes ahora con Quizwiz!

economic system whose advantages include economic sufficiency, freedom, and growth

free market economy

who owns the factors of production and consumes goods and services in a free market system?

households

expectation that encourages people to behave in a certain way

incentive

self-interest is the _____ force in the free market

motivating

what is "the invisible hand of the market place"?

the interaction of buyers and sellers, motivated by self-interest and regulated by competition, all happens without a central plan

What are the characteristics of a free market system?

1. product market 2. monetary flow 3. physical flow 4. firms supply households with goods and services 5. households supply firms with land, labor, and capital 6. factor market

what is a market?

an arrangement that allows buyers and sellers to exchange goods and services

why do markets exist?

because none of us produces all the good and services we require to satisfy our needs and wants

what are the advantages of the free market?

economic efficiency~ as a self regulating system, a free market economy is efficient economic freedom~ free market economies have the highest degree of economic freedom of any economic system economic growth~ because competition encourages innovation, free markets encourage growth additional goals~ free markets offer a wider variety of goods and services than any other economic system

in a free market economy what do households and business firms use the market for?

exchanging money and products

competition is when...

producers in a free market struggle for the dollars of consumers

competition is the _____ force of the free market

regulating

in every transaction, the buyer and seller consider only their _____, which is ______

self-interest, personal gain

concentration of productive efforts of individuals and firms on a limited number of activities

specialization

struggle among producers for the dollars of consumers

competition

power of consumers to decide what gets produces

consumer sovereignty

what is specialization?

the concentration of the productive efforts of individuals and firms on a limited number of activities


Conjuntos de estudio relacionados

Lesson 5 Estructura 5.3 Ser and estar

View Set

Finals HCI : Evaluation Techniques

View Set

Business Ethics Chapters 1-3 by CAR

View Set

Chapter 9: Implementing Information Security

View Set

Med Surge Chap 65 Degenerative Neuro

View Set