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26 Cards in this Set
- Front
- Back
Profit motive
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The force that encourages people and organizations to improve their material well-being.
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Open opportunity
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The concept that everyone can compete in the marketplace.
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Legal equality
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The concept of giving everyone the same legal rights.
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Private property rights
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The concept that people have the right and privilege to control their possessions as they wish.
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Free contract
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The concept that people may decide what agreements they want to enter into.
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Voluntary exchange
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The concept that people may decide what and when they want to buy and sell.
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Competition
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The rivalry among sellers to attract customers while lowering costs.
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Interest group
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A private organization that tries to persuade public officials to act or vote according to group members’ interest.
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Public disclosure laws
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Laws requiring companies to provide full information about their products.
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Public interest
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The concerns of the public as a whole.
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Macroeconomics
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The study of the behavior and decision making of entire economies.
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Microeconomics
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The study of the economic behavior and decision making of small units, such as individuals, families, and businesses.
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Gross domestic product (GDP)
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The total value of all final goods and services produced in a particular economy.
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Business cycle
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A period of macroeconomic expansion followed by a period of contraction.
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Work ethic
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A commitment to the value of work and purposeful activity.
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Technology
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The process used to produce a good or service.
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Public good
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A shared good or service for which it would be impractical to make consumers pay individually and to exclude non-payers.
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Public sector
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The part of the economy that involves transactions of the government.
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Private sector
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The part of the economy that involves transactions of individuals and businesses.
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Free rider
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Someone who would not choose to pay for a certain good or service, but who would get the benefit of it anyway if were provided as a public good.
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Market failure
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A situation in which the market does not distribute resources efficiently.
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Externality
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An 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.
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Poverty threshold
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An income level below that which is needed to support families or households.
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Welfare
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Government aid to the poor.
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Cash transfers
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Direct payments of money to eligible poor people.
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In-kind benefits
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Goods and services provided for free or at greatly reduced prices.
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