Chapter 3 Test Review Flashcards
(29 cards)
Open opportunity
Ability for everyone to enter and compete in a market place
Legal equality
Everyone has the same economic rights under the law
Free contract
Everyone is able to decide which legal agreement they enter
Profit motive
Desire of people to improve
Profit
Money left at the end of the day
Modified free enterprise economy
Free enterprise with some government involvement
Market failure
Occurs when people who are not part of a market place interaction benefit from it or pay part of its cost
Public goods
Products provided by federal, state and local government and consumed by the public as a group
Free rider
Person who chooses not to pay for a good or service but who benefits from it when provided
Infrastructure
Goods and services needed for society to function
Externality
Side effect of a product that affects someone other than the producer or buyer
Negative externality
Impose costs on people who were not involved in the original economic activity
Positive externality
Creates benefits for people who were not involved in the original economic activity
Subsidy
Payment that helps cover the cost of an economic activity that has the potential to benefit the public as a whole
Safety Net
Government program designed to protect people from economic hardships
Transfer payments
Transfer of income from one person or a group, even though the receiver does not provide anything in return
Public transfer payment
Govt transfers income from taxpayers to recipients who do not provide anything in return
What was the fact that started as a joke, owner became millionaire
Pet rock
Gary Ross
Why did the business for the pet rock only last about one year
Because people lost interest
What is Singapore’s nickname
Singapore inc..
A transfer payment is an example of getting a birthday card with money in it
True
Free enterprise system
Capitalism, free to choose
What are some advantages of Mexico’s “informal” market
Provide goods and services people want
Prices are lower
Avoid regulations
Why have these “informal markets formed in Mexico .?
The rules are hard to follow
