Economics - Prices communicate quality, bargains,...

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Economics Chp 2 Notes US economy is free enterprise Free enterprise- people in economic roles can make choices Six things help out free enterprise system o Private property Resources and products owned by individual businesses Property includes much more than land (i.e tools, machines, etc.) Peoples responsibility to maintain their property o Specialization Process in which businesses focus on selling specific products instead of everything Starbucks specializes in coffee products o Voluntary Exchange Buisnesses working together to produce the same product Pencil needs to be cut from tree and goes to many different people o Price System Uses prices as a message system between buyers and sellers
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Unformatted text preview: Prices communicate quality, bargains, efficiency, etc. If percent of profit is negative business is failing Other things play a part besides prices o Market Competition Competition among businesses Two types Resource competition o Competition among businesses for resources like labor and natural resources Product competition o Buyers compete with buyers for services and goods o Businesses compete against one another o Entrepreneurship Innovative thinking New ways of making products, managing resources, etc. Other Systems o Command System...
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