212 Be able to explain the key terms in these sections and know how they relate

212 be able to explain the key terms in these

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2.12. Be able to explain the "key terms" in these sections and know how they relate to concepts and other key terms. (Note that some of these terms, particularly "capital" and "technology," don't carry their usual meanings.) Markets: allocate resources and people and firms freely buy and sell Set wages above the minimum wage Higher wages for college grads More go to college Problem of more skilled workers (workers become more productive) solves and aids growth Changes in prices signal and give incentives as conditions change Technology :and increase in production without an increase in K or L Better capital:improving machinery Better organized production More human capital:education Per worker production function: Shows the relationship between y/l and k/l hold the level of technology constant As we move along the production function the level of technology remains constant Labor productivity: the quantity of goods and services that can be produced by one worker Rule of law: the ability of a government to enforce the laws of the country particularly with respect to protecting private property and enforcing contracts
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Peace Reward innovation Property right Limit government intervention Commercial law Creative destruction: one industry replaces another industry in search of more profits by introducing new or better products 2.13. Know the typical rates of economic growth and real per capita GDP for the countries that we've studied. (notes) US: Economic growth:2% Real per capita GDP:$55,000 China: Economic growth:11% Real per capita GDP: $16,700 Korea: Real per capita gdp North korea: $1,700 Real per capita gdp South korea:$37,700 Real per capita gdp Haiti:$1,800 Real per capita gdp dem rep of congo:$800 2.14. Be able to explain what command, pure market, mixed economies, and socialism are Command: government controls all businesses and directs what they do Pure market: no government intervention in markets Mixed: mostly markets, but some intervention Socialism: some government ownership of firms, more government services than US
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