Unit One Review Flashcards
Allocativly efficient
Specific one helping, either guns or butter
Productively efficient
Using all resources on PPF
Why is physical capital an important factor of production
Save time and money
Cuba economy
Mostly centrally planned
Moving towards mixed
China economy
Less centrally planned than Cuba, moving towards mixed
France economy
Mostly mixed, moving towards free market
USA and Canada economy
Mostly free, moving towards mixed
Hong Kong economy
Mostly free market, moving towards mixed. Most free market economy
Parts of invisible hand
Self interest, motivation, competition
What are the three economic questions
What goods and services should be produced
How should they be produced
And who consumes them
Economic goals of nations
Economic efficiency
Economic freedom- no gov intervention
Economic security and predictability
Economic equity- fair distribution of wealth
Economic growth and innovation- leads to higher standard of living
What goals are difficult to achieve in pure market system
Economic equity
Economic security
Roles and functions in free market economy
Laisse fair Self interest Invisible hand Competition Households
Basic principles of free enterprise
Profit motive Open opportunity Legal equality Private property rights Free contract Voluntary exchange Competition
Consumers roles
When buying products, indicate to producers what to produce and how much
Business cycle
Expansion
Peak
Contraction (recessions to depressions)
Trough
How does gov encourage innovation
Fund research and development projects
Patents (20 years)
Copyrights
What is in place to keep people at or above proverty threshold
minimum wage
Medicare
Long term, 65 older, Heath insurance
Medicaid
Disabled
Short term
Poor
Generational poverty
Poverty and traits passed down through generations
Government basic roles
Public disclosure laws Environmental protection Consumer protection Government regulation Protecting free enterprise
TANF
Cash transfer
Make own welfare programs for needy family’s or house holds
Social security
Cash transfer
Retirement income to elderly and living expenses to disabled
Unemployment
Cash transfer to workers who have lost jobs
Workers compensation
Cash to injured workers
