Chapter 3

Chapter 3 - Chapter 3 1. Economic system- the ways in which...

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Chapter 3 1. Economic system- the ways in which people organize themselves for the production and distribution of goods and services 2. Economic development- represents progressive changes in society’s ability to meet its economic tasks of production and distribution a. Two key elements i. The total amount of goods and services that are produced and available for consumption 1. Surplus- more output than necessary for subsistence consumption ii. institutions 3. Production - refers to the activity that takes the factors of production (resources) and transforms them into goods and services 4. Land - includes raw materials and the land where productive activity takes place 5. Labor- the physical and mental effort of people that is necessary for all production 6. Capital- the technology, buildings, machinery, and equipment that are used in production, as well as the financial resources necessary to organizing production 7. Consumption- the using up of produced goods and services 8. Distribution- the manner in which goods and services are apportioned among the people of society a. Tradition and custom were responsible for organizing production and distribution
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Chapter 3 - Chapter 3 1. Economic system- the ways in which...

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