Unit 1: Market System Economics Flashcards
Politics
Competition for power [in government] [to enact public policy]
Government
The ruling body of a state or nation responsible for making and enforcing laws.
Institutions + processes
Economy
The continuous flow of goods + services [+money?]
Economic System (Government Role)
Organized flow of goods + services.
“Political State” Characteristics
- Known territory/ borders
- Population
- Government
- Sovereignty *Autonomy absolute control of the society
Role/Duty of Any Government
- Protect and defend the borders (foreign conflict)
- Maintain order (laws -> “domestic tranquility”)
- Role in the economy
- Provide public goods + services
General Form Of Government: Dictatorship
- Rule by the few
- Autocracy
- One ruler
- Absolute Monarchy -> Royalty
- King, Czar, Emperor, Pharaoh
- Oligarchy
- One small group rules
- Theocracy
- Religion + political leaders
- Totalitarian
- People’s Republic of China
General Form of Government: Democracy
- Rule by the many/the people ->citizens -> voters => “body politics”
- Constitutional Monarchy
- Limited- Some to no power/figurehead
- Pure, Direct Democracy
- All citizens voting on all matters (small)
- Az initiative process
- Indirect, Representation Democracy
- US “republic” voters choosing representatives to decide political matters.
Democratic Tenets (Features)
- Respect for the individuals
- Free + open (choices) elections
- Frequent + competitive elections
- Majority rule (50%+ to win)
- Protect rights of minority (Party/parties out of power)
Fundamental Economic Question
How to “solve” scarcity?
-How to migrate the effects of scarcity?
Scarcity
The fact that there are limited resources to satisfy unlimited wants.
Trade Off
Choose one option over the other one.
- Choose option that is more beneficial to you
- Lose opportunity to have other option (scarcity)
“Opportunity Cost”
Value of the next option.
Fundamental Assumption of Economists
- People are rational
* People act in their own self interest (benefit)
Resources
Factors of production {What is economically useful?}
