miller chapter 2 study guide

five problems of a centrally planned economy

poor quality, shortages of goods/services, diminishing production, performance falls, cannot meet consumer wants and needs

what is an input?

factors of production

what is an output?

a product

what is another term for “micro”?

small

what is another word for “large”?

macro

what protects your property?

5th amendment

what is karl marx known for?

communism and marxism

what do consumers look for?

lower prices

what is a factor market?

interaction between firms and households

in the business world, who owns private property?

companies

define household

individuals or groups of people living in the same residence who own factors of productions

what is the motivating force behind free market?

self-interest

what is meant by transaction?

when a nation moves from one economical system to another

what economic system is used to start industries and guarantees jobs?

centrally planned economy

what is the market economy based on?

individual choices and not government directives

free market is the foundation of?

US economy

knowing the best way to produce a product is?

efficiency

“let them do as they please”

laissez-faire

to change from government/public to private

privatize

what is authoritarian?

strict obedience to authority, such as a dictator