Chapter 3 Flashcards
Open opportunity
The concept that everyone can compete in the market place
Profit motive
The force that encourages people and organizations to improve their material well-being
Legal Equality
The concept of giving everyone the same legal rights
Private property rights
The concept that people have the right and privilege to control their possessions as they wish
Free contract
People may decide what agreements they enter into
Public disclosure Laws
Requires companies to provide full info about the product
Public Good
A shared good or service that is impractical to make consumers pay individually or to exclude from no payers
Public Sector
Involves transactions of the government
Private sector
In olives transactions of people or business
Free rider
A person who receives a good or service but would still benefit if it were provided to the general public
Market Failure
Situation where resource are not distributed efficiently
Poverty threshold
Income level below that which is needed to support families or households
Cash payments
Direct transfer of money to eligible poor people
Social Security
Cash transfers to the elderly and disabled
Worker’s Compensation
Cash to those injured on the job
In kind benefits
Goods or services provided to those in need
Food giveaways/stamps, legal aide
Medicare
Those over 65 or disabled
Meidcaid
Those under 65 who are at a certain financial level
Macroeconomics
Study of the behavior and decision making of entire economies
Microeconomic
Study of economic behavior and decision making of small units families businesses
GDP
Total value of all final goods and services produced in a particular economy
What are the pillars of free enterprise?
Private property Specialization Voluntary exchange Price system Market competition Entrepreneurship Choice
Private property
Incentive
Specialization
Efficient
Voluntary exchange
Choice
Free enterprise system
Permits conduct of businesses with min gov interaction
Lassez faire
Government should not interfere with the marketplace
