Econ Chapter 3
Terms
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- Profit Motive
- the incentive that drives individuals and business owners to improve their material well-being
- Open Opportunity
- The principle that anyone can compete in the marketplace
- Legal Equality
- the principle that everyone has the same legal rights
- Private Property Rights
- the principle that people have the right to control their possessions and use them as they wish
-
Free
contract - the principle that people may decide what agreements they want to enter into
- Interest Group
- a private organization that tries to persuade public officials to act in ways that benefit its members
- patriotism
- the love of one's country
- eminent domain
- the right of a government to take private property for public use
- public interest
- the concerns of society as a whole
- public disclosure laws
- laws requiring companies to provide information about their products or services
- macroeconomics
- the study of economic behavior and decision making in a nation's whole economy
- microeconomics
- the study of the economic behavior and decision making in small units, such as households and firms
- gross domestic product
- the total value of all final goods and services produced in a country in a given year
- business cycle
- a period of macroeconomic expansion, or growth, followed by one of contraction, or decline
- referendum
- a proposed law submitted directly to the public
- obsolescence
- situation in which older products and processes become out of date
- patent
- a government license that gives the inventor of a new product the exclusive right to produce and sell it
- copyright
- a government license that grants an author exclusive rights to publish and sell creative works
- work ethic
- a commitment to the value of work
- public good
- a shared good or service for which it would be inefficient or impractical to make consumers pay individually and to exude those who did not pay
- public sector
- the part of the economy that involves the transactions of the government
- private sector
- the part of the economy that involves the transactions of individuals and businesses
- infrastructure
- the basic facilities that are necessary for a society to function and grow
- free rider
- someone who would not be willing to pay for a certain good or service but who would get the benefits of it anyway if it were provided as a public good
- market failure
- a situation in which the free market, operating on its own, does not distribute resources efficiently
- externality
- an economic side effect of a good or service that generates benefits or costs to someone other than the person deciding how much to produce or consume
- poverty threshold
- an income level below that which is needed to support families or households
- welfare
- government aid to the poor
- cash transfers
- direct payments of money by the government to poor, disabled, or retired people
- in-kind benefits
- goods and services provided for a fee or at greatly reduced prices
- grant
- a financial award given by a government agency to a private individual or group in order to carry out a specific task