Chapter+3


 * 1) Profit motive is the force that encourages people and organizations to improve their material well-being, voluntary exchange allows people to decide what and when they want to buy and sell, private property rights allow people to control their possesions as they wish, competition allows prices to fall and then consumers get goods at a low price.
 * 2) Private property rights underlie the american free enterprise system.
 * 3) Three benefits of a free enterprise system would be people can open their own business, people can make as much money as they please, and most importantly they can have some economic freedom when deciding how to spend their money and have little to no government interaction.
 * 4) With greater government role in the economy some opportunity costs would be that people would feel controlled by the government and with stricter government rules poeple would lose alot of freedom and maybe they wouldnt be able to start their own business or be able to govern how to run it.
 * 5) If i buy alot of products then i will in turn help stimulate the economy but if i dont buy items then the economy will not be helped and will not get better.
 * 6) Because of certain amendments the government cannot greatly influence the economy dramatically without breaking the ammendments. Because of the constitution congress can levy taxes but they must be apportioned according to the populations so that everyone will pay the same amount.


 * 1) Macroeconomics is the study of the behavior of the behavior and decision making of entire economics and microeconomics is the study of the economic behavior and decision making of small units, such as individuals, families, households, and businesses.
 * 2) The GPD or gross domestic product is the total value of all final goods and services produced in our economy. By following the GPD economists can predict a business cycle.
 * 3) The GPD allows economists to predict business cycles which in turn help economists follow up on major flucuations in the economy.
 * 4) A new technology the unites states has produced is probably more efficent factory line and that in turn helps speed up production times and help turn out more goods.
 * 5) Patents and copyrights make new products different from old ones and now that will create more innovation and with new products being turned out it will help the economy.
 * 6) Macroeconomics are a way of measuring stability.

3.3 Review

1. The sentence is saying that positive externalities are generated due to the help of income and economic growth which come from many public goods. 2. A free rider is a type of market failure because while the free rider is receiving goods/services for potentially nothing, it is demonstrating that that the market is not distributing its resources wisely among the company. 3. The difference between the public and private sector is that while the public sector involves transactions of the government, the private sector deals with transactions made between individuals and businesses. Public Sector - Funding for a new naval ship & Private Sector - Buying a prom dress 4. The government attempts to encourage positive externalities for example by building more homes for low-income families so they may have a place to live. The negative externalities to that is that they shrink the amount of natural habitat there is for some wildlife, which could potentially endanger some species. Two other examples would be if the government invested money into a project that would benefit the country, but if that project actually put us in more debt then we are already in. 5. I believe that the criminal justice system is not a public good because people deserve to be equality protected by law enforcement at all times. People really don't have a choice not to pay for it because if they pay their taxes, some of that tax money is going to their individual paychecks.


 * 1) 'S 1-7 9-12 13-16 ONLY 1
 * 2) Welfare is a general term that refers to government aid for the poor and helps raise peoples standard of living because now with even a small amount of money they can be able to eat and maybe invest the money to help get out of poverty.
 * 3) Poverty exists in a free market economy because the wealth is spread out unevenly throughout society.
 * 4) Cash transfers are direct payments of money to the poor, disabled, and retired people while in-kind benefits are goods and services provided for free or at greatly reduced prices.
 * 5) Social security is a form of redistribution programs because it collects money from current workers and then redistributes that money to current recipients.
 * 6) Externality
 * 7) open opportunity
 * 8) Voluntary exchange
 * 9) Public Good
 * 10) in-kind payment
 * 11) GDP
 * 12) Macroeconomics
 * 13) The Government supports free enterprise because it allows people to start their own business and allow people to determine their own financial destiny.
 * 14) The basic principles of free enterprise is little to no government interpherence and people can run their business anyway they please by still abiding to certain rules.
 * 15) The federals track and influence the business cycles because if they dont then the economy could take a turn for the worse.
 * 16) A. it is a cash transfer bacuase it is a direct money payment. B. Also a cash transfer. C this a in-kind payment because they dont recieve money but rather a good for free or reduced price.
 * 17) The FDA helps limit any form of negative externalities by checking food, drugs, and cosmetic products for any problems.
 * 1) The federals track and influence the business cycles because if they dont then the economy could take a turn for the worse.
 * 2) A. it is a cash transfer bacuase it is a direct money payment. B. Also a cash transfer. C this a in-kind payment because they dont recieve money but rather a good for free or reduced price.
 * 3) The FDA helps limit any form of negative externalities by checking food, drugs, and cosmetic products for any problems.

CHAPTER 1 REVIEW:

Economics: study of how people seek to satisfy their needs and wants by making choices. Scarcity: limited quantities of resources to meet unlimited needs. 3 factors of productions: capital, land, labor. trade-off: give up something to get something else. opportunity cost: most desireable alternative given up as the result of a decision. thinking at the margin: choosing one more or one less unit.

CHAPTER 2 REVIEW 3 basic economic questions are: what goods and services should be produced? how should they be produced? who consumes these goods and services? Free market: self-regulating economic run by individuals Centrally planned economy: 2 most common types are socialism and capitalism. we are a MIXED. Adam Smith: believed in free market. [read his excerpt on page. 33]

CHAPTER 3 REVIEW Benefits of free enterprise: -start your own company -people can make decisions to max. their profits. [ PROFIT MOTIVE] -Voluntary Exchange -PRIVATE PROPERTY RIGHTS -COMPETITION

MACRO: WHOLE ECONOMY MICRO: A PIECE OF IT

GDP: GROSS DOMESTIC PRODUCT -measures economy.