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15 Cards in this Set
- Front
- Back
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free enterprise
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anyone is free to start a business or enterprise
based on individual choice |
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open opportunity
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ability of everyone to enter and compete in the market place of their own free choice
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legal equality
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everyone has the same economic rights
required for free enterprise |
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free contract
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voluntary exchange of work - people decide for themselves what legal agreement they want to enter in
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profit motive
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motivates people to start a business by seeking gain for their economic activities
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market failure
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people who are not part of market place interaction benefit from it or pay part of the cost - gov steps in
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public goods
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goods produced by the gov and consumed by the public
funded with taxes collected by the gov |
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free rider
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person who chooses not to pay for a good or service but who benefits from when it is provided
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infrastructure
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goods + services that are needed for a smooth functioning society
ex. highways, mass transit, power, water, education produced by both private and public sectors |
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externality
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side affect of a transaction
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negative externality
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negative effect or cause for people not inloved
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positive externality
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positive effect for people not involved
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subsidy
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government payment to cover costs that are in public interest (positive externality)
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transfer payments
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transfer of income from one individual to another even though the receiver does not provide goods/services
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public transfer payment
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command economies, social spending
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