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Flashcards in Chapter 3 Deck (26):
1

Profit motive

The force that encourages people and organizations to improve their material well-being

2

Open opportunity

the concept that everyone can compete in the marketplace

3

Legal equality

The concept of giving everyone the same legal rights

4

Private property rights

People have the right and privilege to control their possessions as they wish

5

Free contract

People may decide what agreements they want to enter into

6

Voluntary exchange

People may decide what and when they want to buy and sell

7

Competition

Rivalry among sellers to attract customers while lowering costs

8

Interest group

Private organization that tries to persuade public officials to act or vote according to group members interest

9

Public disclosure laws

Laws requiring companies to provide full information about their products

10

Public interest

Concerns of the public as a whole

11

Macroeconomics

Behavior and decision making of entire economics

12

Microeconomics

Economic behavior and decision making of small units, such as individuals, families, and businesses

13

Gross domestic product (GDP)

The total value of all final goods and services produced in a particular economy

14

Business cycle

Period of macroeconomic expansion followed by a period of contraction

15

Work ethic

Commitment to the value of work and purposeful activity

16

Technology

Process used to produce a good or service

17

Public good

Shared good or service...it would be impractical to make consumers pay individually and to exclude nonpayers

18

Public sector

Part of economy that involves the transactions of the government

19

Private sector

Part of economy that involves the transactions of individuals and businesses

20

Free rider

Someone who would not choose to pay for a certain good or service but gets benefits of it anyway if provided as a public good

21

Market failure

Market doesn't distribute resources efficiently

22

Externality

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

23

Poverty threshold

Income level below that which is needed to support families or households

24

Welfare

Government aid to the poor

25

Cash transfers

Direct payment of money to eligible poor people

26

In-kind benefits

Goods and services provided for free or at greatly reduced prices