Econ 4-02 - ∏ = total revenue – total costs = price x...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
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
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

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....
View Full Document

{[ snackBarMessage ]}

Page1 / 2

Econ 4-02 - ∏ = total revenue – total costs = price x...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online