GAARC ME1 CH2
ME in E
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Cartes-fiches
The market mechanism
Arrangements whereby buyers and sellers interact to determine the prices and quantities exchanged of a commodity.
Market equilibrium
The balancing of supply and demand in a market.
Perfect competition
Markets in which no firm or consumer is large enough to affect market.
The invisible hand
With each participant pursuing his or her own private interest, a market system works to the benefit of all.
Specialization and division of labor
A method of organizing production whereby each group of people concentrates its efforts on a particular set of tasks.
Capital
Productive inputs that include all durable produced goods that are in turn used in production.
Efficiency
The use of economic resources that produces the maximum level of satisfaction possible with the given inputs and technology.
Equity
Involves issues of "fairness" in the distribution of income.
Monopoly
A market structure in which a commodity is supplied by a single firm.
Externalities
Situations in which production or conumption yields positive or negative effects on outside parties.
Welfare State price
A system of social safety nets for the elderly, poor, and jobless.
Markets can occur _____ .
whenever buyers and sellers of the same product can communicate with one another.
If a commodity such as peanuts becomes overstocked, seller will _____ .
lower their prices hoping to lure additional buyers into the marketplace.
A market equilibrium is defined as occurring when ______ .
the price is such that the quantity that buyers want to buy is equal to the quantity that sellers want to sell.
The three economic problems of what, how, and for whom goods shall be produced apply ______ .
to all societies, regardless of stage of development or form of political organization.
There cannot be a problem of what goods to produce if _____ .
each productive input is so specialized that it can be used only in the production of one good and no other.
The "invisible hand" refers to _____ .
the fact that individuals, pursuing their own self-interest, achieve te best good for all when operating in a market economy.
Money is not counted as part of capital because it ________ .
is not acutally useful in production, although it is essential to have money in order to buy the real inputs that are needed for production.
When reference is made to "a capitalist economy," the speaker is probably contemplating an economy _________ .
in which most capital goods are privately owned.
Due in part to heavy use of automobiles in the United Stated this country, Congress passed the Clean Air Act in 1991. Basically, this act is an attempt to ________ .
better define property rights over use of the air
The philosophy of laissez-faire means that ________ .
government interferes as little as possible in economic affairs
Perfect competition means that ________ .
no firm or consumer is large enough to affect the market price
Pollution control policy is directed at improving _______ .
efficiecny
Many governments subsidize primary research because it often benefits all citizens, even those who are not actively involved in research. This makes primary research a(n):
public good
