1. a) profit motive - makes companies work harder to make get the most "consumer friendly" product
b) voluntary exchange - allows customers to buy what they feel is the most appropriate product
c) private property rights - allows companies to produce the products and consumers consume them without fear of govt. taking over
d)competition - forces companies to make a better more affordable product for consumers so that they make sales
2. the constitutional guarantees that underlie the American free enterprise system are the rights to life liberty and property, pursuit of happiness, and freedom.
3. Three benefits of a free enterprise system are:
1) competition allows customers to get the best products at the cheapest prices.
2) customers can buy whatever product they want
3) govt. only interferes when it helps everyone
4. some opportunity costs in govt. having a greater role in the economy is loss of ability to control companies by the people
5.people influence the economy because they determine what companies make by what they "consume"
Ch. 3.2 1-6
1. Macroeconomics is the study of the behavior and decision making of entire economies (when Obama spends all of our money) and microeconomics is the study of economic behavior and decision making of small units such as indivuduals, families, and businesses (buying chicken for a families dinner).
2. Gross domestic Product (GDP) is the total value of all final goods and services produced in a particular economy. This provides a mean to analyze economic growth because it shows how much an economy can provide and uses.
3. GDP shows business cycles because it shows the max an economy spends at a period of expansion and the minimum it spends in a period of contraction.
4. One example of new technology that has resulted in greater productivity for the united states is assembly lines for computers or something stupid that's a better example than one i can think of.
5.a) patents and copyrights have promoted innovation because they force people to provide a new product or service rather than recreate what other people already provide.
b) innovation helps an economy because it continuously makes new expansions in the world of technology that consumers can use.
6. Economic stability is measured by an economy providing and selling at an equilibrium.
Ch. 3.3 1-5
1. Providing certain goods or services for consumers for free generates a positive side effect for the person providing the goods/services because they receive help from consumers and people around them to continue being the provider.2. Free riders are people who would not pay for a good/service, yet reek the benefits of the good/service. This creates market failure because nothing in this world is free for everyone and someone is losing the money.3. Public sector is the part of the economy that involves the transactions of the govt.(the city providing park and reck centers) and private sector involves individual transactions(people buying milk for family).4. The govt. tries to aid positive externalities like encouraging public schooling so that they get the positive effect of the educated economy. They try to limit negative externalities like acid rain by encouraging less pollution by people and companies.5. The criminal justice system is not a public good for several reasons. First off it's not even a good, it's a service. Also it is not cool when I try to rob a store and I get "arrested."
9.a) Govt. supports free enterprise by keeping out of the market as much as possible, allowing the people to create their own markets and opinions.
b) The govt. rules and regulations described in this chapter are govt. limiting companies abilities to pollute.
10. Free Enterprise means that the govt. is involved a very limited amount in business. They only place they make a stand is in areas where they are protecting the citizens. This promotes competition and innovation.
11. The US govt. tracks and influences business cycles in order to help the citizens and monitor their standards of living.
12. a) Unemployment insurance is a cash transfer because the govt. actually gives this away.
b)
Pg. 55 1-6
1. a) profit motive - makes companies work harder to make get the most "consumer friendly" productb) voluntary exchange - allows customers to buy what they feel is the most appropriate product
c) private property rights - allows companies to produce the products and consumers consume them without fear of govt. taking over
d)competition - forces companies to make a better more affordable product for consumers so that they make sales
2. the constitutional guarantees that underlie the American free enterprise system are the rights to life liberty and property, pursuit of happiness, and freedom.
3. Three benefits of a free enterprise system are:
1) competition allows customers to get the best products at the cheapest prices.
2) customers can buy whatever product they want
3) govt. only interferes when it helps everyone
4. some opportunity costs in govt. having a greater role in the economy is loss of ability to control companies by the people
5.people influence the economy because they determine what companies make by what they "consume"
Ch. 3.2 1-6
1. Macroeconomics is the study of the behavior and decision making of entire economies (when Obama spends all of our money) and microeconomics is the study of economic behavior and decision making of small units such as indivuduals, families, and businesses (buying chicken for a families dinner).
2. Gross domestic Product (GDP) is the total value of all final goods and services produced in a particular economy. This provides a mean to analyze economic growth because it shows how much an economy can provide and uses.3. GDP shows business cycles because it shows the max an economy spends at a period of expansion and the minimum it spends in a period of contraction.
4. One example of new technology that has resulted in greater productivity for the united states is assembly lines for computers or something stupid that's a better example than one i can think of.
5.a) patents and copyrights have promoted innovation because they force people to provide a new product or service rather than recreate what other people already provide.
b) innovation helps an economy because it continuously makes new expansions in the world of technology that consumers can use.
6. Economic stability is measured by an economy providing and selling at an equilibrium.
Ch. 3.3 1-5
1. Providing certain goods or services for consumers for free generates a positive side effect for the person providing the goods/services because they receive help from consumers and people around them to continue being the provider.2. Free riders are people who would not pay for a good/service, yet reek the benefits of the good/service. This creates market failure because nothing in this world is free for everyone and someone is losing the money.3. Public sector is the part of the economy that involves the transactions of the govt.(the city providing park and reck centers) and private sector involves individual transactions(people buying milk for family).4. The govt. tries to aid positive externalities like encouraging public schooling so that they get the positive effect of the educated economy. They try to limit negative externalities like acid rain by encouraging less pollution by people and companies.5. The criminal justice system is not a public good for several reasons. First off it's not even a good, it's a service. Also it is not cool when I try to rob a store and I get "arrested."
Ch. 3 Review 1-7,9-12,1. externality
2. open opportunity3. voluntary exchange
4. free rider
5. cash transfers
6. gross domestic product
7. macroeconomics
9.a) Govt. supports free enterprise by keeping out of the market as much as possible, allowing the people to create their own markets and opinions.
b) The govt. rules and regulations described in this chapter are govt. limiting companies abilities to pollute.
10. Free Enterprise means that the govt. is involved a very limited amount in business. They only place they make a stand is in areas where they are protecting the citizens. This promotes competition and innovation.
11. The US govt. tracks and influences business cycles in order to help the citizens and monitor their standards of living.
12. a) Unemployment insurance is a cash transfer because the govt. actually gives this away.
b)