2.3

which participants are of the greatest importance in determining what goods and services are produced

households

which of the following are the two key groups of participants in the circular flow of income

households and firms

what is the outcome of enforcing contracts and property rights in a market system

increased economic activity

copyrights are a tax on readers in the sense that

limit the supply of related creative work which results in higher prices

the term psychic rewards refers to

non monetary forms of remuneration that are psychologically uplifting

is it necessary for all of the managers in all of these firms to know how all of the components of the torch are manufactured and how the components are assembled into a smartphone?

of course not, any given manager need only command the knowledge necessary to produce the component of the torch are manufactured and how the components are assembled into a smartphone

what is an entrepreneur

operate businesses that produces goods and services

what is the circular-flow diagram and what does it illustrate

shows how household and firms are linked through product and factor markets

regarding the entity occupying the center in the two system, it appears that

the consumer is at the center of the market system while the guild system centered on the producer

what are private property rights?

the rights individuals and firms have to the exclusive use of tangible, physical property and intellectual property

in their with to the organic pig manure fertilizer, famers responded to

the rising price of chemical fertilizers

why do entrepreneurs play a key role in a market system

they bring together factors of production

I'm not selfish and most people I know aren't selfish

this statement is based on the misconception that following your self interest and being selfish are the same thing

psychic rewards that an entrepreneur might receive include

ALL EXCEPT STOCK

why are independent courts important for a well-function economy?

ATA

with regard to the innovation of new products and technologies, the fact that it is open to the new producers suggests that the new market system is _____ conductive to such innovation

MORE

what is a free market

a free market is one where the government does not control the production of goods and services

would you expect more competition among producer in a guild system or a market system

a market system is clearly more competitive because it allows for the free entry and exit of producers

if a market system functions well, which of the following is necessary for the enforcement of controls and property rights

an independent court system

in what ways does a free market economy differ from a centrally planned economy? Unlike a free market economy....

centrally planned economies have extensive government controls

owners could use their property as _____ which by affecting their ability to start a business would _____ personal income and national wealth

collateral for a loan, increase

what role do they play in the working of a market system? Property rights

encourage significant number of people to be willing to risk funds by investing them in business, encourage firms to spend omen on research and development A&B

in a simple circular flow model, there are flows of _____ and flows of ____

facts of production; goods and services funds received from the sale of factors of production; spending on final goods and services A&B

according to the Pennsylvania right to farm act _____ have the property rights to the smell of the air around the farms because it allows

farmers, to engage in practices that are common to agriculture

a free market is a market with _____ government restrictions on how a good or service can be produced or sold and with ____ government restrictions on how a factor of production can be employed

few, few

-George buys a telsa Model s. This takes place in the PRODUCT market. -the household DEMANDS the good and the firm SUPPLIES the good. -Telsa increases employment at its fremont plant. This takes place in the FACTOR market. the households SUPPLY the labor and the firm DEMANDS the labor. -George works 20 hours per week at Mcdonlads. this takes place in the FACTOR market. the household SUPPLIES the labor and the firm DEMANDS the labor. -Geoge sells land he owns to Mcdonalds so it can build a new restaurant. This takes place in the FACTOR market. the household SUPPLIES the factor of production and the firm DEMANDS the factor of production

fill in the blank

what incentives does a market system provide to encourage self interest

financial reward

what are the two main categories of participants in markets

firms and households

what is so important about the idea of the invisible hand

firms will provide consumers what they want without the government

according to adam smith, which of the following is necessary for the proper function o the market system

for markets to work, people must be free to pursue their self interest

is it necessary for the CEW of blackberry to know this information

generic knowledge about the product is certainly to be expected

according to adam smith, which of the following is the instrument the invisible hand uses to direct economic activity

prices

if copyrights are a to on readers, governments provide legal framework to enforce them because

provide needed protection for authors and creators of movies or other artistic works

what did smith mean by this?

pursuing their own self interest, entrepreneurs produce the goods and services most desired by their customers for financial reward

firms are likely to produce more of a good or services when its price _____ and less of a good or service when its price _____

rises, falls

what is the role of an entrepreneur

to take risks, brig together the factors of production, to operate a business. ATA