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Chapter_2 - bring competition d Freedom of choice*Prices...

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Chapter 2 Economics: The Creation and Distribution of Wealth Business : Any activity that seeks profit by providing goods and services to others. Economics : The study of how society chooses to employ resources to produce goods and services and distribute them for consumption among carious 1. Basic Economic Theories a. Thomas Malthus (Early 1800s) i. Would soon be too many people for available resources ii. Neo-Malthusians: birth control and sterilization (China) b. Adam Smith 1776 i. Father of modern economics ii. Wealth of nations – Freedom is vital to survival of any economy iii. “Invisible hand” 2. Capitalism: An economic system in which most factors of production are privately-owned, and operated for profit. a. Private property b. Ownership/ profit c. Freedom of competition: The ability to do things different, new ideas to
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Unformatted text preview: bring competition. d. Freedom of choice: *Prices are influenced by competition, and by supply and demand. Demand: Qty. of products people are willing to buy at a specific time. Baby wipes: Soldiers at war shifted demand curve “Shower” French Wine: We hate the French so we didn’t want their wine. Supply: Qty. of products that sellers are willing to sell at a specific time *Willingness as a seller. Highly Controlled : Communism (state ownership/ state control) vs. Moderate Control : Som (important business owned/operated by state. Some private property) *MOST ECONOMIES FALL HERE IN BETWEEN Low Control: Capitalism (free market economy) Fig. 2.4/ Page 51...
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