RELATIVE PRICE- a commodity's price in terms of another commodity
MONEY PRICE- actual price you pay in dollars and cents
money prices during different time periods don't tell you very much- must find relative
people respond to ch
MACROECONOMICS- study of economics as a whole (consumers, workers, and firms
output, employment levels, and price stability measure national economic performance
measuring economic performance helps:
the government decide tax and spend
FREE ENTERPRISE- another name for a market economy or capitalism
ECONOMIC SYSTEM- the way in which a society decides how to use its resources to
produce and distribute goods and services.
VOLUNTARY EXCHANGE- people trade freely with one another.
so many producers of a standardized product that no one firm can affect the market
produce at a minimum cost and sell at the lowest possible cost
profits tend toward zero in the long run due to competition
Exchange, Money, and Interdependence
EXCHANGE- trading goods, services, and money
BARTER- direct trading of one good for another (inefficient)
money acts as a:
medium of exchange (dont end up with goods/services you dont want like in the
Poverty/Homelessness in Canada
costs and consequences (indirect, societal, productivity, healthcare, judicial, etc.) of
poverty are greater than direct spending on social programs
pressure on hospitals would be alleviated, higher literacy/numerac
demand for a producers product is directly linked to demand for the input of resources of
that producer Ex) cars: if demand drops, so does demand for car production workers
to make the highest wages with the best job security, f
buyers and sellers find this "right" price by trial and error and observing reactions to price
changes in the market. Eventually a price emerges and remains stable for awhile.
When a factor of change for supply or demand chan
process of turning resources (input) into products (output)
resources and products can be goods and/or services
Ex) ranchers labour (work), land, feed, equipment, and buildings are the input; cattle are
Scottish Economist Philosopher
father of modern economics and capitalism
Inquiry into the Nature and Causes of the Wealth of Nations: outlined details of a
free market economy
The Theory of Moral Sentiments: discusses the so
ECONOMIC(AL)- means the practice of thrifty management the wise use of people,
money, and materials in order to obtain maximum value from their output or get the best
value for our money.
SCARCITY- unlimited wants for limited resources
CHAPTER 2 :
The Market System and '
1.1 DiFFerentiule between 1:
:en'lmdnd system and 1: market
the Circular Flew tee.
11 list the main characteristics eF
the market system.
t-iuppese yeti are at e mail in ‘Ir'srteein'er end are assigned te-