Econ Ch.3 Study Help - Chapter Three Firm An organization that transforms resources(inputs into products(outputs The primary producing units in a

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Chapter Three: Firm: An organization that transforms resources (inputs) into products (outputs). The primary producing units in a market economy. - Most firms exist to make profits for their owners, but some do not. (Ex: Universities) Entrepreneur: A person who organizes, manages, and assumes the risks of a firm, taking a new idea or a new product and turning it into a successful business Households: The consuming units in an economy *Firms and Households: The basic decision-making units Output Markets (Product Market): The markets in which goods and services are exchanged. - Firms supply and households demand Factor Markets (Input Market): The markets in which the resources used to produce products are exchanged. - Firms buy inputs from households, which supply these input Circular Flow of Economic Activity (pg. 49) Labor Market: The input/factor market in which households supply work for wages to firms that demand labor. Capital Market:
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This note was uploaded on 03/06/2008 for the course ECON 1120 taught by Professor Wissink during the Spring '05 term at Cornell University (Engineering School).

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Econ Ch.3 Study Help - Chapter Three Firm An organization that transforms resources(inputs into products(outputs The primary producing units in a

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