Podcast
Questions and Answers
In a pure market system, what is the role of government intervention, if any?
In a pure market system, what is the role of government intervention, if any?
- The government actively regulates businesses to ensure fair practices.
- The government's presence is acceptable only during economic recessions, or depression.
- The government owns and operates essential services like healthcare and utilities.
- Government intervention is considered unacceptable. (correct)
What condition makes a monopoly acceptable within a market system?
What condition makes a monopoly acceptable within a market system?
- When the monopoly agrees to keep prices below a certain threshold.
- When the market cannot viably support more than one business. (correct)
- When the business is willing to share profits with other companies.
- When the monopoly is owned and operated by the government.
Antitrust laws are designed to prevent what?
Antitrust laws are designed to prevent what?
- Companies from engaging in international trade.
- The establishment of monopolies under any circumstances.
- Companies from suppressing competition in the marketplace. (correct)
- Unfair labor practices, such as low wages.
What primarily determines prices in a market system?
What primarily determines prices in a market system?
Which phase of the business cycle is characterized by high unemployment rates and decreased spending?
Which phase of the business cycle is characterized by high unemployment rates and decreased spending?
In a market system, what is the primary role that consumers play in determining production?
In a market system, what is the primary role that consumers play in determining production?
The 'invisible hand' in a pure market system refers to what concept?
The 'invisible hand' in a pure market system refers to what concept?
Which is NOT a main value of a mixed economy?
Which is NOT a main value of a mixed economy?
What is the main function of crown corporations?
What is the main function of crown corporations?
What is the primary purpose of a labor union?
What is the primary purpose of a labor union?
Which of the following best characterizes 'collective bargaining'?
Which of the following best characterizes 'collective bargaining'?
Which statement accurately contrasts a pure market system with a mixed economy?
Which statement accurately contrasts a pure market system with a mixed economy?
In the context of supply and demand, what typically happens to the price of a product if demand significantly increases while supply remains constant?
In the context of supply and demand, what typically happens to the price of a product if demand significantly increases while supply remains constant?
How do successful businesses typically leverage consumer sovereignty to their advantage?
How do successful businesses typically leverage consumer sovereignty to their advantage?
How might antitrust laws be used to address a potential monopoly situation, such as the gas station in a village?
How might antitrust laws be used to address a potential monopoly situation, such as the gas station in a village?
Which of the following scenarios best illustrates the profit motive in a market system?
Which of the following scenarios best illustrates the profit motive in a market system?
Which phase of the business cycle typically follows a depression?
Which phase of the business cycle typically follows a depression?
What is the relationship between scarcity, supply, and demand?
What is the relationship between scarcity, supply, and demand?
Why is free competition necessary for a market system?
Why is free competition necessary for a market system?
Which initiative would a labor union most likely undertake to improve working conditions for its members?
Which initiative would a labor union most likely undertake to improve working conditions for its members?
Flashcards
Market System
Market System
A system where people can freely buy and sell goods/services at mutually agreed prices.
Marketplace
Marketplace
Any place where buyers and sellers interact to exchange goods or services.
Monopoly
Monopoly
Exclusive control of the production or sale of a product/service by one entity.
Antitrust Laws
Antitrust Laws
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Supply vs. Demand
Supply vs. Demand
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Business Cycle
Business Cycle
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Prosperity
Prosperity
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Depression
Depression
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Profit Motive
Profit Motive
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Consumer Sovereignty
Consumer Sovereignty
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Invisible Hand
Invisible Hand
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Crown Corporations
Crown Corporations
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Labor Union
Labor Union
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Collective Bargaining
Collective Bargaining
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Study Notes
- Market system: A system where individuals can freely buy and sell goods and services at mutually agreed-upon prices.
- Also referred to as capitalism, market economy, private enterprise, free enterprise, or laissez-faire.
- Transactions occur in a marketplace.
- Marketplace: Any location where buyers and sellers interact.
- Pure capitalist systems oppose government interference.
- Pure capitalists do not want the government to own businesses, provide services, or impose regulations on business owners.
Essential Elements
- Private ownership and the freedom to buy and sell.
- Free competition.
- Businesses should have the liberty to produce any goods or services they choose.
Free Competition
- Lack of it gives control of the market, therefore removing the possibility of better prices.
- Drives improvement and innovation.
Monopoly
- Exclusive control by one entity over the production or sale of a product or service.
- Acceptable when the market cannot sustain multiple businesses.
- Example: A gas station in a small village, as long as it doesn't prevent competitors from entering the market.
- Antitrust laws: Prevent companies from suppressing competition.
- Prices are determined by supply and demand.
Scarcity
- Impacts product value based on availability.
- Demand: How many people want a product.
- Supply: How many products or services are available.
Business Cycle
- Consists of cycles of economic expansion and contraction.
- Prosperity
- Recession
- Depression
- Recovery
Prosperity
- Characterized by increased spending and low unemployment rates.
- Driven by increased industrial activity due to higher demand.
- War can stimulate an economy.
Depression
- Results from decreased spending and high unemployment rates.
- Caused by decreased demand in industry.
Profit Motive
- The main goal of a business is to make a profit.
- Successful businesses prioritize customer satisfaction with quality products at reasonable prices.
- Companies that ignore customer needs or satisfaction risk failure.
- Successful companies adapt to current trends and technologies.
Consumer Sovereignty
- Consumers decide what gets produced by "voting with their wallets".
- In a pure market system, businesses regulate themselves out of self-interest.
- Actions like harming or deceiving customers are bad for business.
- "Invisible hand" describes self-regulation by businesses.
- Businesses do not regulate themselves; government intervention is necessary.
Mixed Economy Values
- Growth
- Equality
- Safety
- Security
- Efficiency
- Freedom
Crown Corporations
- Wholly owned federal or provincial organizations structured like private companies.
- Provide essential services.
- Promote economic development.
- Support and promote Canadian culture and identity.
Labour Union
- An organization protecting workers' rights and interests.
- Collective bargaining: Negotiating as a group.
- The right to bargain collectively is a key right established by unions for workers
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