Chapter+2

MISSING

1. Specialization is the concentration of the productive efforts of individuals and films on a limited number of activities. 2. Factor markets are firms that purchase factors of production while product markets are products and goods produced by the firms or households. 3. Profit is the financial gain made in a transaction. 4. Households are a group of people living together and they are consumers of goods that help stimulate the economy. Farms are organizations that use resources to produce a product which in turn sells to households. 5. Competition helps firms benefit the customers because they themselves fight over a lower price the consumers finds then they want a lower price if there was no consumption. 6. "The invisible hand of the marketplace" said by Adam Smith means that in each transaction, the buyer and seller consider only their self-interest or their own personal gain. Self-interest in other words is the motivating force in the free market. The overall result is that consumers get the products they want at prices that closely reflect the cost of producing them. 7. The connection between incentives and consumer sovereignty in a free market economy is like incentives motivates consumers sovereignty then they have a driver and vehicle relationship and incentives are the drivers. 8. Economic equity cannot be achieved easily because we are all worth different amounts and example being a doctor is worth more than a car washer or a bus boy. 9. - 10. UGGs and BearPaw. Pomegranates and apples. Office Depot and small office supply stores.