Basic Principles
Explain profit motive
the desire for financial gain as an incentive in economic activity
Who participates in competition?
Firms and companys
what does GDP stand for?
gross domestic product
Who is someone that would not choose to pay for a certain good or service, but would benefit from it?
A free rider
What is a direct transfer payment of money to an eligible person?
A cash transfer
explain open opportunity
An opportunity that has not yet been won or lost
What is a group of people that seeks to influence public policy on the basis of particular common interest or concern?
an interest group
What is work ethic?
The principle that hard work is intrinsically virtuous or worthy of reward
Define market failure
the economic situation defined by an inefficient distribution of goods and services in the free market.
What are in-kind benefits?
Benefits which employees or directors receive from their employment but which are not included in their salary cheque or wages
define private property rights
Tangible and intangible things owned by individuals or firms over which their owners have exclusive and absolute legal rights
What kind of laws requires companies to provide full information about their products?
public disclosure laws
What is the application of scientific knowledge for practical purposes, especially in the industry?
technology
What is externality?
A side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in the cost of the goods or services involved
Define competition
A situation in which two or more people or groups are trying to get something which not everyone can have
what is free contract
the concept that people may decide what agreements they want to enter into
define public interest
the welfare or well-being of the general public
Explain public good
A commodity or service that is provided without profit to all members of a society, either by the government or a private individual or organization
What is a poverty threshold?
The minimum level of income deemed adequate in a particular country.
define macroeconomics
The part of economics concerned with large-scale or general economic factors, such as interest rates and national productivity
What is a voluntary exchange?
The free exchange of goods and services between buyers and seller in some sort of marketplace
What is the difference between microeconomics and macroeconomics?
Macroeconomics: the part of economics concerned with large-scale or general economic factors
Microeconomics: the part of economics concerned with single factors and the effects of individual decisions
What is the difference between a private sector and a public sector?
Public Sector: the part of an economy that is controlled by the government.
Private Sector: the part of the national economy that is not under direct government control.
What is welfare?
Statutory procedure or social effort designed to promote the basic physical and material well-being of people in need.
define private sector
The part of the national economy that is not under direct government control.