ECON 102 CHAPTER 1 QUIZ NOTES.docx - Economy the set of social arrangements that answers 3 fundamental questions 1 What is produced 2 How is it produced

ECON 102 CHAPTER 1 QUIZ NOTES.docx - Economy the set of...

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Economy the set of social arrangements that answers 3 fundamental questions: 1. What is produced? 2. How is it produced? 3. For whom is it produced? Economics The study of the production, distribution, and consumption of goods and services. Market an institution that brings together buyers and sellers of goods and services. Market-oriented economy an economy in which most economic decisions are made by buyers and sellers of goods or services. Command economy an economy in which the government either makes or strongly influences how most economic decisions are made. Black market an illegal market that breaks government rules on prices or sales. Buyer and seller make transactions without government approval The Division of Labor The way in which the work required to produce a good or service is divided into tasks performed by different workers. First introduced by Adam Smith in his book, "The Wealth of Nations" in 1776 Specialization
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  • Spring '10
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