1. define economic system. 2. list and describe the three key economic questions. 3. list and...
TRANSCRIPT
Chapter 2 Section 1 – pgs. 23-27
1. Define economic system.2. List and describe the Three Key Economic Questions.3. List and describe the four types of economic systems.4. Using the Chart Below, describe each of the Economic Goals and Societal Values.
Then provide a real-life example of each.
Economic Goal and Societal Values
Summary Example
1. Economic Efficiency
2. Economic Freedom3. Economic Security
and Predictability4. Economic Equity5. Economic Growth
and Innovation6. Additional Goals
Economic System – method used by society to produce goods and services
Economic System
What and how much should be produced? Who should produce it? How should it be produced? Who should share in its use?
Four Economic Questions
1. Traditional economy – relies on habit, custom, or ritual to decided the 3 economic questions
2. Market economy – economic decisions are made by individuals and are based on exchange, or trade.
3. Command Economies – in a centrally planned economy, the central government alone decides how to answer the three economic questions.
4. Mixed Economies – market-based economic systems in which government plays a limited role.
Four Economic Systems
Economic Goals and Societal Values - pgs. 23-27Economic Goal and Societal Values
Summary Example
1. Economic Efficiency
2. Economic Freedom
3. Economic Security and Predictability
4. Economic Equity
5. Economic Growth and Innovation
6. Additional Goals
Making the most of scarce resources
Manufacturer knowing the best way to use resources wisely (Assembly Line)
Freedom from government intervention in the production and distribution of goods/services
Working where you want, spending money the way that you want, owning a business, etc.
Knowing that goods and services will be available, payments made on time, government will provide a safety net in times of economic downturns
Security – Unemployment Checks, Social SecurityPredictability – gas at gas pumps, food at store
Fairness, being paid according to your skill level, not being discriminated against
Lawyers earn more than nurses, computer programmers more than truck drivers
Economic growth refers to improving standard of living and GDP. Innovation, improving existing technology.
Agricultural age to industrial age to information age. Innovations in computers, communication.
Future goal for society. Environmental protection, full employment, universal medical care.
Review Economic GoalsStatements Economic Goal
1. Last week I willingly enrolled in college courses at Coastal. I am so happy that I make my decisions about my future.
2. My uncle lost his job, but thankfully he is able to receive unemployment checks.
3. Wal-Mart recently upgraded all of their registers to touch screen monitors.
4. General Motors replaced all of their human workers with robots in order to increase productivity.
5. As a result of the internet and technology, our economy has experienced significant expansion over the past 30 years.
6. I can always expect Publix to have the food I like!
7. Hopefully in the future we will have full employment.
8. With every degree/skill I earn, I improve my ability to make money.
1. Economic Freedom
2. Economic Security
3. Economic Innovation (Efficiency)
4. Economic Efficiency (Innovation)
5. Economic Growth (Innovation)
6. Economic Predictability
7. Additional (Future) Goals (Equity)
8. Economic Equity (Growth)
Economic Efficiency
Description: Using the factors of production in the most productive way possible, as to maximize profit
Picture Summary: This picture represents assembly line production at an automobile manufacturing plant.
This shows how the division of labor and specialization can increase efficiency.
Economic Goals and Societal Values Poster Project – pgs. 26-27Poster Requirements:1. Title - Economic Goals and
Societal Values2. Summary Statement – “The
Economic Goals and Societal Values provide a basic framework for each society and their attempts to provide for their people.”
3. 8 pictures to represent each of the economic and social goals.
4. Label, describe and summarize each picture
1. Economic Efficiency2. Economic Freedom3. Economic Security 4. Economic Predictability5. Economic Equity6. Economic Growth7. Economic Innovation8. Additional Goals
Economic Goals and Societal ValuesSummary Statement:
The Economic Goals and Societal Values provide a basicframework for each society and
their attempts to provide fortheir people.
Economic EfficiencyDefinition: societies try to maximize
the factors of productionPicture:This picture represents an efficient use of resources through
assembly line production
Economic Security
Economic Growth
Economic Equity
Economics Goals and Societal Values Poster Project pg. 23 - 27
Economic Freedom Additional Goals
Economic Innovation
Economic Predictability
Poster Requirements:1. Title - Economic Goals and Societal Values2. Summary Statement – Purpose of economic and Societal Values3. At least 8 pictures to represent each of the Economic Goals and Social Values4. Label, definition and picture description for each of the 8 Economic Goals and Societal Values
Daily Assignment Chapter 2 Section 1 – pgs. 23-27
Bead Game Simulation
1. How does a traditional economy answer the three economic questions?
2. Describe traditional economies and their communities.
3. What is a disadvantage to a traditional economy?
4. How are the three economic questions answered in a market economy?
5. What are other names for market economies?
6. How are the three economic questions answered in a command economy?
7. Why are they referred to as command economies?
8. Why are most modern economies referred to as mixed economies?
Chapter 2 Section 1 – Daily Assignment Questions pgs. 26 -27
Chapter 2 Section 2 Imagine that you are walking into Walmart.
List 3 items that you could purchase and the departments that you would find them in.
Market – buyers and sellers meet to exchange goods and services Market Economy – economic decisions(what to produce, how to
produce, for whom to produce) are made by consumers and businesses based on exchange of goods and services
Capitalism (free market) – Individuals and businesses own the factors of production and can profit on them
Voluntary Exchange - is the act of buyers and sellers freely and willingly engaging in market transactions
Chapter 2 Section 2 – The Free Market
Specialization Specialization – the separation of tasks within a
system; people focus on a specific purpose/task Division of Labor – Workers perform fewer tasks
in order to operate more efficiently
Household – Person or group of people living in a residence Consumers - use the goods and services (outputs) to
satisfy wants and needs Firm – business, organization that uses resources to
produce a product, which it then sells Suppliers – transform “inputs” (F.O.P.) into “outputs”
(products)
Households and Firms
Product Markets – Houses and firms interact; producers sell their goods and services to consumers Households are buyers of goods and services Firms are sellers of goods and services (outputs)
Product Markets
Factor Markets – the markets where productive resources (F.O.P)/Inputs are bought and sold Labor - Firms (businesses) hire workers and pay them
salaries Land - Purchased/rented land Capital - Use money from households, purchase capital
goods
Factor Markets
Circular Flow Model of Economic Activity – shows the flow of money and goods/services from and to businesses and households
Households Firms
Factor Market
Product Market
Consumer Spending
Consumer Goods and Services
Final Goods and Services Sold
Business Income/Revenue
Land, Labor, Capital - provided by household Inputs for Production
(F.O.P.)
Payment for F.O.P. – Rent (Land) Wages (Labor), Interest (Capital), Profit (Entrepreneurs)
Income to Households/Individuals
Households• Buy and Consume
Goods and Services• Own and sell
the F.O.P
Firms(Business)• Produce and sell
Goods and Services• Hire and use F.O.P.
Product Market
• Market for Goods
and Services• Firms sell
Households Buy
Factor MarketMarket for
F.O.P• Households
sell• Firms buy
Application Questions1. In the factor market, what do businesses provide households?2. The flow of goods and services in the product market is represented by which
firm and products on the model below?3. When you apply for a job at the local Starbucks which market are you in?4. Which color arrows represent the flow of money; what color arrows represent
the flow of inputs and outputs.
Income/payment the F.O.P
Starbucks/CoffeeFactor
Blue/Tan
Circular Flow Model of Economic Activity
Households Firms
Factor Market
Product Market
Consumer Spending/Investing
Goods and Services Purchased: Caramel Frappuccino
Goods and Services Sold
Business Income/Revenue
Land, Labor, Capital, Entrepreneurs Inputs for
Production (F.O.P.)
Payment for F.O.P. – Wages, rent, capital goods
Income to Households/Individuals
Daily Assignment - Circular Flow Model of Economic Activity
Household1. ________________________
FirmFirm 1. _____________________________
Firm 2. _____________________________
Factor Market
Product Market
Consumer Spending
1. _________________________
Goods Purchased
1. ______________________________
2. _______________________________
Goods Offered1. ___________________________
2. ___________________________
Business Income
1. _________________________
Factor of Production Offered
1. ___________________________
Input for Production
1. ___________________________
Payments for F.O.P
1. _________________
Weekly Income
1. __________________
"Winning is not a sometime thing; it's an all the time thing. You don't win once in a while; you don't do things right once in a while; you do them right all the time. Winning is a habit. Unfortunately, so is losing. There is no room for second place. There is only one place in my game, and that's first place. I have finished second twice in my time at Green Bay, and I don't ever want to finish second again. There is a second place bowl game, but it is a game for losers played by losers. It is and always has been an American zeal to be first in anything we do, and to win, and to win, and to win. Every time a football player goes to play his trade he's got to play from the ground up-from the soles of his feet right up to his head. Every inch of him has to play. Some guys play with their heads. That's O.K. You've got to be smart to be number one in any business. But more importantly, you've got to play with your heart, with every fiber of your body. If you're lucky enough to find a guy with a lot of head and a lot of heart, he's never going to come off the field second.
Vince Lombardi “What it Takes To Be Number 1”
Running a football team is no different than running any other kind of organization-an army, a political party or a business. The principles are the same. The object is to win-to beat the other guy. Maybe that sounds hard or cruel. I don't think it is. It is a reality of life that men are competitive and the most competitive games draw the most competitive men. That's why they are there-to compete. To know the rules and objectives when they get in the game. The object is to win fairly, squarely, by the rules-but to win. And in truth, I've never known a man worth his salt who in the long run, deep down in his heart, didn't appreciate the grind, the discipline. There is something in good men that really yearns for discipline and the harsh reality of head to head combat. I don't say these things because I believe in the "brute" nature of man or that men must be brutalized to be combative. I believe in God, and I believe in human decency. But I firmly believe that any man's finest hour, the greatest fulfillment of all that he holds dear, is that moment when he has worked his heart out in a good cause and lies exhausted on the field of battle - victorious."
...Vince Lombardi
Vince Lombardi “What it Takes To Be Number 1”
1. Do you agree with Vincent Lombardi’s assertion that people are born with the desire to compete why or why not?
2. What areas do you see competition in the economy of the United States ?
3. How is competition beneficial to our economy/society?
4. How is it harmful to our economy/society?
Competition Article
Competition Competition – efforts among sellers/producers to
attract consumers at various prices At the heart of market economic philosophy
Incentive – an expectation that encourages people to behave in a certain way (positive and negative) Businesses respond to profits Consumers respond to price change (high/low)
1. What was Adam Smith’s ethnic and professional background?
2. What was the name of the book that he published; when was it published?
3. What did Smith identify in the book?
4. What did he assert about specialization and division of labor?
5. What did he believe about the role of government in the economy?
6. Define the French term Laissez Faire; why did Smith believe in Laissez-Faire economics?
7. What is meant by his metaphor of the Invisible Hand?
8. How do both consumers and businesses benefit from this philosophy?
Chapter 2 Section 2 – Daily Assignment Economic Profile Adam Smith pgs. 33
- Fill in the blanks for each of the following:1. QB Peyton Manning’s high salary, vs. a cashier’s
low salary, represents economic _________.2. Moving from the personal computer to handheld
devices represents an economic _________.3. “Today, I know Chevron will have gas” represents
economic ___________.4. GM receiving a government bailout represents
economic ____________.5. Increasing the production of goods, services and
jobs would represent economic ________.
Word Bank: innovation, predictability, growth, security, equity.
Economics Daily Ten #2
equity
innovation
predictability
security
growth
Command – central authority owns and operates the Factors of Production
Centrally Planned Economy – central government answers the three economic questions; WHAT to produce, HOW to produce, and FOR WHOM to produce Oppose private property, free market pricing, economic
freedom
Chapter 2 Section 3 – Centrally Planned Economies
Karl Marx – German social philosopher that studied economic systems in Europe
Communist Manifesto – written by Marx and Frederick Engels became basis for modern-day command economies
Thought capitalism would fail because it put to much wealth in the hands of few and left everyone else poor
Believed in a “no-class” system, where all share in wealth/power Socialism – distribution of wealth and F.O.P. equally amongst society Communism – political and economic system with centralized economic
decision-making Authoritarian Government – exact strict obedience from their citizens; do not
allow individual freedom
Socialism and Communism
Economics Daily Ten #41. Why does a free market economy need some government
intervention?a. so that the government has total control over factor resourcesb. to ensure the government has the freedom to tax as necessaryc. to make sure that the government can fulfill its needs for goods and servicesd. to provide for things that the marketplace does not address (i.e. market failures)
2. In what kind of economy does the government make all the decisions?a. socialistb. laissez fairec. centrally planned, or command economyd. free enterprise
Explanation: (d) – most modern economies are mixed, or have some government involvement to regulate, protect and oversee.
Explanation: (c) – command economies are controlled by a dictator, or small group of economic policy makers.
Explanation:
Explanation:
1. How did the Soviet Union arise?2. Where did Soviet planners allocate the
factors of production?3. How did the Soviet Union control
agriculture?4. What three industries did Soviet Planners
favor?5. How did the Soviet Union view
entrepreneurial endeavors?6. What was the quote used by Soviet
consumers as a joke?7. Why were Soviet Consumers’ left
unsatisfied? Page 39 – Russia in Crisis8. How did many Russians initially respond
to the Communist collapse?9. What happened over the next decade?10. How did Russia deal with corruption?11. What were some characteristics of
Russia’s financial problems?12. What evidence can be seen that success
is in sight?
Chapter 2 Section 3 – Daily Assignment Questions “The Former Soviet Union” pgs. 36-38
Do Now Ch 2 Section 3 Scenario 1You have two cows.You trade one to your neighbour for a bull.You only produce what you need to survive. Scenario 2You have two cows.The State takes both and gives you just
enough milk to live Scenario 3You have two cows.You sell one and buy a bull.Your herd multiplies, and your wealth grows.You sell your herd and retire on the income.
1. What economic system matches each scenario?
2. Which scenario do you think is the most ideal and why?
3. Which scenario do you think sounds the most like the United States? Why?
4. What countries do you know of that could fall into scenario 2.
Free Enterprise – competition in the marketplace is allowed to flourish with no interference from government
Modified Free Enterprise (mixed economy) – businesses are free to compete with some government regulation/intervention
Chapter 2 Section 4 – Modern Economies
North Korea
Cuba
Iran
China
Mexico France
South Africa
Poland Japan
United Kingdom Hong Kong
Canada Singapore
United States
Centrally Planned Free Market
Laissez Faire – no government intervention in the economy Some government intervention is necessary in the economy;
some needs are difficult to answer in the marketplace National defense, roads and highways, education, etc… Government acts a protector, regulator and overseer of
economy
Laissez Faire in a Modern Economy
Taxes from both households and businesses Income, state, social security, Medicare/Medicaid,
unemployment insurance, etc.
Government Money
Government purchases land, labor, and capital from households
United States gov’t pays 2.8 million employees $9.7 billion for labor
Government in the Factor Market
Government purchases goods and services from firms (businesses) Buildings, office supplies, telephones, computers, etc.
Government in the Product Market
Daily Assignment – Economic GoalsEconomic Goals Market Command Tradition
Economic Efficiency Yes - High levels of economic freedom
No - Many aspects of economic activity are tightly controlled and state-dominated
No - Extremely limited, a person’s role in society is based on custom, heritage and tradition
Economic Freedom
Economic Security
Economic Predictability
Economic Equity
Economic Growth
Economic Innovation
Daily Assignment – Economic GoalsUsing the Chart Below, identify how each of the economic goals are addressed.
Economic Goals
Market Economy
Command Economy
Traditional Economy
Economic Freedom
Yes - High levels of economic freedom
No - Many aspects of economic activity are tightly controlled and state-dominated
No - Extremely limited, a person’s role in society is based on custom, heritage and tradition
Economic Efficiency
Economic Security
Economic Predictability
Economic Equity
Economic Growth
Economic Innovation
Daily Assignment – Economic GoalsUsing the Chart Below, identify how each of the economic goals are addressed.
Economic Goals
Market Command Tradition
Economic Efficiency
Highly stressed because of scarcity and competition
Lack of profit motive can lead to a lack of efficiency
Slow to adapt to new ideas/technology. Inefficient by standards of modern societies
Economic Freedom
High levels of economic freedom
Many aspects of economic activity are tightly controlled and state-dominated
Extremely limited, a person’s role in society is based on custom, heritage and tradition
Economic Security
Economic Predictability
Economic Equity
Economic Growth
Economic Innovation
Daily Assignment – Economic GoalsUsing the Chart Below, identify how each of the economic goals are addressed.
Economic Goals
Market Command Tradition
Economic Efficiency
Highly stressed because of scarcity and competition
Lack of profit motive can lead to a lack of efficiency
Slow to adapt to new ideas/technology. Inefficient by standards of modern societies
Economic Freedom
High levels of economic freedom
Many aspects of economic activity are tightly controlled and state-dominated
Extremely limited, a person’s role in society is based on custom, heritage and tradition
Economic Security
Safeguards In society, but general employment is not assured
Economic security is assured based on full employment and government sponsored programs
Economic security is assured based on traditional means of production
Economic Predictability
Economic Equity
Economic Growth
Economic Innovation
Daily Assignment – Economic GoalsUsing the Chart Below, identify how each of the economic goals are addressed.
Economic Goals
Market Command Tradition
Economic Efficiency
Highly stressed because of scarcity and competition
Lack of profit motive can lead to a lack of efficiency
Slow to adapt to new ideas/technology. Inefficient by standards of modern societies
Economic Freedom
High levels of economic freedom
Many aspects of economic activity are tightly controlled and state-dominated
Extremely limited, a person’s role in society is based on custom, heritage and tradition
Economic Security
Safeguards In society, but general employment is not assured
Economic security is assured based on full employment and government sponsored programs
Economic security is assured based on traditional means of production
Economic Predictability
High predictability Lack predictability because government controls F.O.P.
Predictable in most cases. Can be unpredictable, because F.O.P. are controlled through traditional means
Economic Equity
Economic Growth
Economic Innovation
Daily Assignment – Economic GoalsUsing the Chart Below, identify how each of the economic goals are addressed.
Economic Goals
Market Command Tradition
Economic Efficiency
Highly stressed because of scarcity and competition
Lack of profit motive can lead to a lack of efficiency
Slow to adapt to new ideas/technology. Inefficient by standards of modern societies
Economic Freedom
High levels of economic freedom
Many aspects of economic activity are tightly controlled and state-dominated
Extremely limited, a person’s role in society is based on custom, heritage and tradition
Economic Security
Safeguards In society, but general employment is not assured
Economic security is assured based on full employment and government sponsored programs
Economic security is assured based on traditional means of production
Economic Predictability
High predictability Lack predictability because government controls F.O.P.
Predictable in most cases. Can be unpredictable, because F.O.P. are controlled through traditional means
Economic Equity Fairness (hiring and payment) is a primary goal of a market economy
Lack of equitable payments based on the production of goods and services
Equity is based on customary means of production, women have assigned roles, men have assigned roles
Economic Growth
Economic Innovation
Daily Assignment – Economic GoalsUsing the Chart Below, identify how each of the economic goals are addressed.
Economic Goals
Market Command Tradition
Economic Efficiency
Highly stressed because of scarcity and competition
Lack of profit motive can lead to a lack of efficiency
Slow to adapt to new ideas/technology. Inefficient by standards of modern societies
Economic Freedom
High levels of economic freedom
Many aspects of economic activity are tightly controlled and state-dominated
Extremely limited, a person’s role in society is based on custom, heritage and tradition
Economic Security
Safeguards In society, but general employment is not assured
Economic security is assured based on full employment and government sponsored programs
Economic security is assured based on traditional means of production
Economic Predictability
High predictability Lack predictability because government controls F.O.P.
Predictable in most cases. Can be unpredictable, because F.O.P. are controlled through traditional means
Economic Equity Fairness (hiring and payment) is a primary goal of a market economy
Lack of equitable payments based on the production of goods and services
Equity is based on customary means of production, women have assigned roles, men have assigned roles
Economic Growth
Grow at a fast rate due to competition and profit motive
Lack of growth because of a lack of efficiency and profit motive
Lack of growth due to a lack of productivity and innovation
Economic Innovation
Daily Assignment – Economic GoalsUsing the Chart Below, identify how each of the economic goals are addressed.
Economic Goals
Market Command Tradition
Economic Efficiency
Highly stressed because of scarcity and competition
Lack of profit motive can lead to a lack of efficiency
Slow to adapt to new ideas/technology. Inefficient by standards of modern societies
Economic Freedom
High levels of economic freedom
Many aspects of economic activity are tightly controlled and state-dominated
Extremely limited, a person’s role in society is based on custom, heritage and tradition
Economic Security
Safeguards In society, but general employment is not assured
Economic security is assured based on full employment and government sponsored programs
Economic security is assured based on traditional means of production
Economic Predictability
High predictability Lack predictability because government controls F.O.P.
Predictable in most cases. Can be unpredictable, because F.O.P. are controlled through traditional means
Economic Equity Fairness (hiring and payment) is a primary goal of a market economy
Lack of equitable payments based on the production of goods and services
Equity is based on customary means of production, women have assigned roles, men have assigned roles
Economic Growth
Grow at a fast rate due to competition and profit motive
Lack of growth because of a lack of efficiency and profit motive
Lack of growth due to a lack of productivity and innovation
Economic Innovation
Innovation is at a high rate due to changes in the marketplace and competition
Less incentive to innovate because profits and credit go to the state
Innovation is non-existent by modern standards
Daily Assignment – Comparing Economic SystemsTradition Command Market
1.
2.
3.
1.
2.
3.
1.2. 3.4. 5. 6.7.8.9.
1.
2.
1.
2.
1.2. 3.4. 5. 6.
1.
2.
1.
2.
3.
4.
5.
1.
2.
3.
4.
Adv
anta
ges
Dis
adv
anta
ges
Exa
mpl
es
1. Traditional Economy
2. Command Economy
3. Market Economy
4. Market
5. Free Market
6. Specialization
7. Division of Labor
8. Household
9. Consumer
10.Firm
11. Supplier
12.Product Market
13.Factor Market
14.Centrally Planned Economy
15. Socialism
16. Communism
17. Authoritarian
18. Laissez-Faire
Chapter 2 – VIS Terms
Junk!!!
Due Wednesday 9 - 81. DAQ's pg. 26-27, Ch. 2 Sec. 1
2. Video Questions - North Korea
3. Comparing Economic Systems, Advantages + Disadvantages Economic Systems + Reflection Questions
4. D.A. Circular Flow Model
5. Circular Flow (Elisa and Marcella)
6. Online Assignment - Scarcity
7. Ch. 2 Sec. 2 D.A. Adam Smith
8. Ch. 2 Sec. 3 D.A. "The Former Soviet Union"
9. Economic Goals and Am. Free Enterprise Flow Chart
10. Chapter 2/3 Study Guide
11. Ch. 2 CW Puzzle
12. Ch. 3 CW Puzzle
13. Ch. 2 Notes
14. Daily Tens (12)
15. Vocab Terms
Junk!!!
Circular Flow Model of a Mixed Economy
HouseholdsFirms
Factor Market
Product Market
Consumer Spending/Investing
Goods and Services Purchased:
Goods and Services Sold
Business Income/Revenue
Land, Labor, Capital, Entrepreneur
Inputs for Production (F.O.P.)
Payment for F.O.P. – Wages, rent, capital goods
Income to Households/Individuals
Taxe
sTaxes
Expenditures
Expenditures
Taxe
s
Taxes
EF3b
26. EF3b: From the principle of voluntary exchange, we conclude that:a. often buyers are made better off at the expense of sellersb. often sellers are made better off at the expense of buyersc. both the buyer and the seller must be better off as a result of a transactiond. neither the buyer nor the seller are necessarily made better off as a result of a transaction
27. EF3b: The concept that people may decide what
and when they want to buy and sella. voluntary exchangeb. fraudulent exchangec. competitiond. economic integrity
Study Guide Chapter 2/31. Economic System
2. What to produce, Who to produce them for, How to produce them
3. Economic: efficiency, freedom, security, predictability, equity, growth, innovation, additional goals
4. Tradition, custom, ritual, habit
5. Central planners dictate the what, how, for whom
6. Households and firms through production and consumption
7. Market
8. Market economy
9. Capitalism
10. Households and Firms
11. Input is something used to produce and output, which is a final good or service
12. Product
13. Factor
14. Adam Smith, Wealth of Nations
Study Guide Chapter 2/315. Be limited in its role in the economy, “Let
them do as they please”.
16. Invisible Hand
17. See Circular Flow
18. a) Productb) when it changed hands from the household to the
firm
c) Factor, labor
d) Grills, hostesses, cashiers
e) Factor
19. Karl Marx, Communist Manifesto
20. That it would fail because it put too much money in the hands of the rich and not in the hands of the poor
21. Communism, Socialism
22. Authoritarian
23. Economic Freedom
24. Property Rights
25. Profit Motive
26. Voluntary Exchange
27. Competition
Study Guide Chapter 2/328. Their purchases signal to producers
what to produce (consumer sovereignty)
29. Overseer, protector, regulator, informer
30. Technology
31. Public Good
32. Public
33. Private
34. Free Rider
35. Market Failure
36. Externality
1. Give an example of specialization/division of labor, and explain why it is beneficial.
2. Give an example of a positive and negative externality not mentioned on the test.
3. Explain why the United States is not a true “pure market/free enterprise” system.
Extra Credit