Economic Vocabulary for Ch. 4

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  • Topic: Money, Profit, Inverse demand function
  • Pages : 2 (636 words )
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  • Published : April 7, 2011
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1. Private property- the right of private persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other property 2. Freedom of enterprise- the freedom of firms to obtain economic resources, to sue those resources to produce products of the firm’s own choosing, and to sell their products in the markets of their choice 3. Freedom of choice- the freedom of owners of property resources to employ or dispose of them as they see fir, of workers to enter any line of work for which they are qualified, and of consumers to spend their incomes in a manner that they think is appropriate 4. Self-interest- that which each firm, property owner, worker, and consumer believes is best for itself and seeks to obtain 5. Competition- the presence in a market of independent buyers and sellers competing with one another and the freedom of buyers and sellers to enter and leave the market 6. Roundabout production- the construction and use of capital to aid in the production of consumer goods 7. Specialization- the use of the resources of an individual, a firm, a region , or a nation to concentrate production on one or a small number of goods and services 8. Division of labor- the separation of the work required to produce a product into a number of different tasks that are performed by different workers; specialization of workers 9. Medium of exchange- any item sellers generally accept and buyers generally use to pay for a good or service; money; a convenient means of exchanging goods and services without engaging in barter 10. Barter- the exchange of one good or service for another good or service 11. Money- any item that is generally acceptable to sellers in exchange for goods and services 12. Four fundamental questions- the four questions that every economy must answer: what to produce, how to produce it, how to divide the total output, and how to ensure economic flexibility 13. Economic cost- a payment that...
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