Vocabulary
the desire to earn money by creating and selling goods and services
What is profit motive?
It accounts for about one-fifth of all the economic activity in the world.
What is the American Economy?
The major reason why capitalism is a successful economic system.
What is profit motive?
Who decides what is supplied and what is demanded?
What is increase?
A Scottish philosopher and economist who published a book titled The Wealth of Nations
Who is Adam Smith?
System in which private citizens own and decide how to use the factors of production in order to make money.
What is capitalism?
Competition often forces inefficient producers out of business, leading to these two benefits for customers.
What are lower prices and higher quality?
The profit motive pushes people to do this.
What is thinking of new or improved goods and services?
The activity that takes place in the markets is known to economists as this
What is voluntary exchange?
The father of modern economics
Who is Adam Smith?
System in which individuals and groups have the freedom to start businesses with little government interference
What is a free enterprise system?
Who decides what is supplied and what is demanded in the US economy?
What are buyers and sellers—individuals and businesses?
The amount of money left over after all the costs of production have been paid.
profit
How markets affect competition
What is encouraging competition?
From the writings of Smith and others came this idea
What is a laissez-faire?
the act of buyers and sellers freely and willingly choosing to take part in marketplace transactions.
What is voluntary exchange?
The freedoms given to Americans and their businesses allow the marketplace to
What is adapt quickly to changing economic conditions?
The most efficient producers sell goods at _____ prices.
What is lower?
What three things can be sold in in voluntary exchange?
What is the buying and selling of goods and services?
What is buying and selling of any factors of production?
In his book, Smith argues that the best way for society to advance is for people to work for their ______________
What is self interest?
the freedom to own and use their property as one wishes
What are private property rights?
What is one economic freedom people in the US economy have?
People are free to buy and sell the factors of production.
Americans are free to become entrepreneurs and choose what type of goods or services to offer.
They may also choose where to locate their business, whom they hire, and how they want to run the business.
Competition leads to these three things
greater efficiency, higher–quality products, and more satisfied customers
Workers have the freedom to sell this at work under capitalism.
What is labor?
When the United States was formed, many of the Founders were influenced by this book
What is The Wealth of Nations?
economic system where government should not interfere in the marketplace
What is Laissez-faire economics?
Six unique features of the free enterprise system
What are economic freedom; markets; voluntary exchanges; the profit motive; competition; and private property rights.?
Private property rights give Americans the incentive to do these four things
What is driving, working, saving, and investing?
Something that always happens in voluntary exchange.
What is giving something up?
The person who wrote this “In political economy, I think Smith’s Wealth of Nations is the best book.”
Who is Thomas Jefferson?