Econ Chapter 3 Test

Profit motive

legal equality

Everyone has the same rights

private property

People have the rights to control their own possessions and how they are used

voluntary exchange

eminent domain

RIght of the gov to take private property for public use

Main measure to track the business cycle

GDP gross domestic product

Macro economics

study of econ behavior and decisions making in a nations whole economy

Microeconomics

study of econ behavior and descicons on a personal scale like house holes and firms

business cycle

macro economic expansion or growth, followed by one

externality

economic side effect of a good or service that generates unintended benefits or costs someone other than the person deciding how much to produce or consume

market failure

situation in which the free market does not distribute resources efficiently

public good

shared good or service would be impractical to make consumers pay individually for

Referendum

vote by the people on a specific law or issue instead of being decided by government leaders

Obsolescence

when something is outdated and is no longer in use because of a replacement

Patent

legal right given to an inventor to make or sell ineventon for a certain number of years

Copyright

a law that protects someone’s creative work from being copied without [permission

work ethic

a persons attitude about work showing responsibility effort and reliability

public good

a product or service that everyone can use and can’t bee kept from anyone like clean air or street lights

Public sector

The of economy run by the government like schools or police departments

Private sector

PArt of econ ran by individuals

Market Failure

When market doesn’t work properly and fails to give people what they need efficiently

Externality

A side effect of a econ activity. that affects people not directly involved like a population

poverty threshold

Minimum level of income the government says is needed to meet basic living needs

Welfare

Government program that give financial help to people in need

Cash transfer

direct payment of money from gov to people in need

in kind benefits

help given in form of goods/services instead of money l