Econ 4-02 - = total revenue total costs = price x quantity...

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Basic Questions / Functions of economic systems 1. What 2. How? 3. For when a. Distribution of goods/services b. Distribution of Income/wealth 4. Is it possible to impact upon the level and/or the Direction of associate econ activity. 5. Capitalism answers a. It’s possible for capitalism to experience process cycles i. It gets its ups and downs, but mainly goes up (why we follow capitalism) Flow Diagram of capitalist (market) econ system Product Market ------------- Firm ------ $ ------- Factor Market ---------- Ld, L, K, KN -------- Households Households – Seller in factor Market – Supplier of factors Product Market Factor Market Firm – Buyer in factor markets demand or factors Factors Factors + Payments Symbols Ld Rent Rt L Wages w K Interest i or r Kn Profit Land, labor, capital, know how
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Unformatted text preview: = total revenue total costs = price x quantity total costs Firm goes to the mix of inputs to produce output Q=f(LD,L,K,Kh) Firm 1. seller in product market a. supplier in product prices 2. Buyer in Factor Markets a. Demands of factors 4 questions about capitalism: 1. Has capitalism always existed? a. Market vs. non-market systems 2. How did capitalism develop? a. Adam Smith and David Ricardo 3. Does capitalism always work? a. (Karl Marx) b. If not, then does a roll for a 3 rd party (gout) exist and does gout help or hurt the market economy? 4. Will capitalism continue as a way to organize economic activity and/or will it change or be replaced by some other economic system into the 21 st century....
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Econ 4-02 - = total revenue total costs = price x quantity...

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