Week 1

Question 1

What is the relationship between democracy and economic growth

Answer 1

D allows for secure private property, freedom to experiment w/o govt interference … led to growth…growth leads to inequality and fuels social and democratic movement

growth allowed societies to afford democracy- large increase in the amount of cap goods in the economy

Question 2

What is the permanent technology revolution

Answer 2

the amount of time required for producing most products fell generation after generation

Question 3

what are three key aspects of capitalism

Answer 3

private property

markets

firms

capitalism is an economic system in which the methods of producing goods and services is centred on the firms which own and control the capital goods that are used in production.

Question 4

List three negative externalities

Answer 4

environmental pollution

climate change

driving into the centre of London

Question 5

list three postive externalities

Answer 5

public benefits of R&D

walking rather than driving

refurbishing your house

Question 6

what is technology?

Answer 6

a process that takes a set of materials and other inputs - including the work of people and capital goods such as machines and creates an output

Question 7

what is a capital good

Answer 7

goods required to produce other goods and services eg. lightbulbs for electricity

Question 8

what is private property

Answer 8

the right and expectation that one can enjoy one’s possession in ways of one’s own choosing, excluding others from their use, and their disposal of them by gift or sale to others who then become the owner

Question 9

what is a market

Answer 9

a way of connecting to people who may mutually benefit by exchanging goods or services through a process of buying or selling

Question 10

what are the three key characteristic of markets

Answer 10

reciprocated - one person transfers a g/s and is directly reciprocated by a transfer eg. money

voluntary - exchange means that it must be beneficial in the opinion of both parties

competition - but also cooperative - each pursuing an objective

Question 11

what is a firm and what are the two key characteristics

Answer 11

a business/organisation which pays wages and employees people and purchases inputs to produce and market g/s with the intention of making a profit

created to make a profit and they are productive