Chapter 2 Flashcards
households, families, and informal community groups
core sphere
governments and other local, national, and international organizations established for some public purpose beyond individual or family self-interest, operating without the goal of making a profit
public purpose sphere
a good whose benefits are freely available to anyone, and whose use by one person does not diminish its usefulness to others
public good
firms that produce goods and services for profitable sale
business sphere
businesses, normally small in scale, operating outside government oversight and regulation
informal sphere
a place (physical or virtual) where there is a reasonable expectation of finding both buyers and sellers for the same product or service
market (first meaning)
the interaction of buyers and sellers defined within the bounds of broad product categories, such as the market for used cars or the real estate market
market (second meaning)
an economic system (a “market economy”) that relies on markets to conduct many economic activities
market (third meaning)
an economy with little government regulation
laissez-faire economy
a way of structuring human activities based on customs, infrastructure, and laws
institution
ownership of assets by nongovernment economic actors
private property
a formal, often written agreement that states the terms of an exchange and may be enforceable through a legal system
explicit contract
an informal agreement about the terms of a market exchange, based on verbal discussions or on traditions and normal expectations
implicit contract
roads, ports, railroads, warehouses, and other tangible structures that provide the foundation for economic activity
physical infrastructure
a medium of exchange that is widely accepted, durable as a store of value, has minimal handling and storage costs, and serves as a unit of account
money
