Questions and Answers
What is voluntary exchange?
What is the definition of inventions?
A new, useful process, machine, improvement, etc., that did not exist previously.
Define traditional economics.
Economic systems that occur in less developed countries which rank religious and cultural values as more important than economics.
What characterizes command economics?
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What is a market economy?
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What is a mixed economy?
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Define public goods and services.
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What does redistribution of income refer to?
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What are market failures?
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What are property rights?
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What is deregulation?
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Define productivity.
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What is input in economics?
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What does output refer to?
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What is capital investment?
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What are capital goods?
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Define human capital.
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What is meant by a higher standard of living?
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What does government regulation imply?
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Define market failures again.
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Study Notes
Voluntary Exchange
- Refers to voluntary participation of buyers and sellers in market transactions.
Inventions
- Defined as new and useful processes or machines that are products of unique intuition or genius.
Traditional Economics
- Characterized by economies in less developed countries guided by customs and traditions, prioritizing religious and cultural values over economic factors.
Command Economics
- An economic system where the government centrally makes all economic decisions.
Market Economy
- Operates mainly on market forces to allocate resources and establish prices, driven by supply and demand dynamics.
Mixed Economy
- Combines elements of private enterprise and government involvement in economic activities.
Public Goods and Services
- These goods and services benefit many people without restricting usage, often funded by government.
Redistribution of Income
- Achieved through taxation of wealthier individuals to support those with less income, promoting social equity.
Market Failures
- Occurs when the market mechanism fails to produce an efficient outcome or desired results.
Property Rights
- Represents individuals' authority to own and control scarce resources.
Deregulation
- The process of removing government regulations, potentially fostering competition and innovation.
Productivity
- The efficiency measure evaluated by the ratio of produced quantity and quality to labor input over time.
Input
- Refers to any stimulating information or event influencing production processes.
Output
- Represents the total amount produced within a certain timeframe.
Investment
- Involves the allocation of resources or assets for future benefits, including the formal assignment of roles through ceremonial acts.
Interest
- Represents a pleasant distraction that captures one's attention and thoughts.
Capital Investment
- Involves expenditure for acquiring buildings, tools, and machinery necessary for producing goods and services.
Capital Goods
- Encompasses durable goods like machinery and tools that facilitate production over time.
Human Capital
- Represents the skills and knowledge that workers acquire through education and experience.
Higher Standard of Living
- Results from increased investments leading to higher productivity levels.
Government Regulation
- Involves granting exclusive production rights to a single firm for specific goods or services to ensure control and order.
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Description
Explore key concepts of voluntary exchange and innovations in traditional economics with this set of flashcards. Each card provides definitions to enhance your understanding of market transactions and inventive processes.