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Cards In This Set
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What does the concept of purposeful behavior suggest?
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People make different choices because their circumstances and information differ
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Economic systems differ according to what two main characteristics?
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Ownership of resources and methods of coordinating economic activity
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What is the main problem with barter?
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It encourages self-interest and selfishness
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Which fundamental question about a competitive market system primarily focuses on technological progress and capital accumulation?
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How will the system promote progress?
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What is indicated by some industries declining, while others may be expanding?
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Resources are being reallocated
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Why did command systems in the Soviet Union fail?
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Because of coordination and incentive problems
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What are producers doing when they maximize their profits from the production of a good or service?
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Exhibiting purposeful behavior
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What is most limited in a pure market system?
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Government
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What does the use of money for exchange encourage?
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More specialization in production
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What do markets explained on the basis of supply and demand assume?
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Many buyers and many sellers of a standardized product
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The price elasticity of demand is the measure of what?
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Responsiveness of quantity demanded to a change in price
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