Business 150 Exam #1

University of Kansas

Scarcity

Desires exceed availability. With this comes tradeoff

Property rights

Bundle of Sticks

Bundle of sticks

Rights to Use, Transfer, Exclude, Profit

Subjective Value

Value lies within the person not the good

Voluntary exchange

Moving resources from someone who value a good less to someone who values a good more

Eminent domain

Government takes resources for public use. Requires compensation

Wealth

The flow of value over time

tragedy of the commons

Full benefit for a fraction of the cost. Resources are over exploited. (Catch shares, fruit tree)

Paper wall

Regulations that make legal ownership difficult

Opportunity cost

Highest value alternative to your decision. Intangible

Plato

Property held within the people

Aristotle

"That which is common has the last amount of care"

John Locke

Chief end of government is the preservation of private property

Adam Smith

National defense is protection of private property from external threats

Equality

E of Opp., E of Out., E before God.

Equality of Opportunity

Everyone has the same chance to pursue outcomes free of unnecessary barriers

Equality of Outcome

Everyone finishes with the same result."Finishing the race at the same time"

Equality before God

All people have inalienable rights. Life, liberty, and the pursuit of happiness (Declaration of Independance)

Fairness

"No definition" - Friedman

Liberty

The right to shape your own life, as long as it does not intrude on others

Bourgeois virtue

Change in spirit allowing ordinary people to innovate.

The great enrichment

Explosion in human prosperity -Mcklusky