chapter 3
What is a market Economy?
Economic decisions are made by individuals :)
voluntary exchange
where the buyer and the seller both had to give something up
What are economics?
Study of decision making.
Cost versus benefits
Weighing good and bad(Pros and Cons)
what is labor resources
putting human capital to work
What is a Traditional Economy
An economy in which production is based on customs and traditions. They dictate what,how, and whom to produce.
Why not all societies specialize
There is a population density and isolation from large markets.
what are Economic Enigmas
puzzles or riddles that might be explained through an economic analysis
Markets coordinate trade
Markets are usually the best way to coordinate exchanges between buyers and sellers(Selling products from other countries)
what is capital resources
The tools, equipment, and buildings that are used to produce goods and services
what is 3 fundamental economic questions
What to produce? How to produce? For whom to produce?
economic interdependent
We rely on others on us, on provide the goods and services that we consume.
What is
what is Thinking at the Margin
Thinking ahead when making decisons(One more or one less)
What is Ceteris Paribus?
Hold all things equal and change only one variable.
The 3 roles of government in a mixed economy
protection, regulation, and public benefits
equal opportunity
Everyone is born in equal terms of our rights,freedoms,and opportunities to make the best out of our talents/abilities
What are the two branches of Government
Macroeconomics and Microeconomics
what is Trade makes people better off
By focusing on what we do well trading with others, we will end up with more and better choices than by trying to do everything for ourselves.(Tailor+Shoemaker)
What is a Sparkplug?
entrepreneurs supply the energy, drive, and enthusiasm needed to turn ideas into realities
What are the 6 economic goals?
freedom, efficiency, equity, growth, security, stability
What is the significant about the Commerce Clause of the Constitution?
To regulate trade with foreign nations and among the several states this clause authorizes the national gov to promote trade and economic interdependence among the states.
What is a perpetual resource?
A resource that is widely available and no danger of being used up.
what is the Scarcity forces trade offs principle
No free lunch
What are the four roles that entrepreneurs perform in the production process?
Innovator, strategist, risk taker, and spark plug.