Chapter 3 Vocab Flashcards
The force that encourages people and organizations to improve their material well being
Profit motive
The concept that everyone can compete in the marketplace
Open opportunity
The concept of giving everyone the same legal rights
Legal equality
The concept that people have the right and privilege to control their possessions as they wish
Private property rights
The concept that people may decide what agreements they want to enter into
Free contract
The concept that people may decide what and when they want to buy and sell
Voluntary exchange
The rivalry among sellers to attract customers while lowering costs
Competition
A private organization that tries to persuade public officials to act or vote according to group members interest
Interest group
Laws requiring companies to provide fill information about their products
Public disclosure laws
The concerns of the public as a whole
Public interest
The study of the behavior and decision making of entire economics
Macroeconomics
The study of the economic behavior and decision making of small units, such as individuals, families, and businesses
Microeconomics
The total value of all final goods and services produced in a particular economy
Gross domestic product (GDP)
A period of macroeconomic expansion followed by a period of contraction
Business cycle
A commitment to the value of work and purposeful activity
Work ethic
The process used to produce a good or service
Technology
A shared good or service for which it would be impractical to make consumers pay individually and to exclude nonpayers
Public good
The part of the economy that involves the transactions of the government
Public sector
The part of the economy that involves the transactions of individuals and businesses
Private sector
Someone who would not choose to pay for a certain good or service, but would get the benefits of it anyway if it were provided as a public good
Free rider
A situation in which market does not distribute resources efficiently
Market failure
An economic side effect of a good or service that generates benefits or costs to someone other than the person deciding how much to produce or consume
Externality
An income level below that which is needed to support families or households
Poverty threshold
Government aid to poor
Welfare
Direct payments of money to eligible poor people
Cash transfers
Goods and services provided for free or at greatly a reduced prices
I’m kind benefits
