Mason and Jamie's Economics Page
Chapter 3 Econ Summary
Free Enterprise
Jamie Ramseyer Mason Elias Mr. Treadway |Period 3
Overview The chapter "Free Enterprise" how an economy answers the three economic questions. Also, it discusses the five features of free enterprise. It also shows the circular flow of economic activity and how the government, businesses, and households interact with one another. It also tells about profit and loss and how in a free enterprise economy will do whatever it takes to make profit, and loss will destroy an economy. It talks about ethics such as what is good or bad, wrong or right, or characteristics of judging an economy on ethics. It discusses entrepreneurs and how they explore new ways of doing things and how they must take risk to get reward.
Key Terms
Private Property- any good that is owned by an individual or a business
Public Property- any good that is owned by the government
Household- an economic unit of one person or more that sells resources and buys goods and services
Circular Flow Of Economic Activity- the economic relationships that exist between different economic groups in an economy
Profit- the amount of money left over after all the costs of production have been paid. Profit exists whenever total revenue is greater than total cost
Loss- the amount of money by which total cost exceeds total revenue
Ethics- the principles of conduct, such as right and wrong, morality and immorality, good and bad
Entrepreneur- a person who has a special talent for searching out and taking advantage of new business opportunities
Contract- an agreement between two or more people to do something
Private Good- a good of which one person's consumption takes away from another person's consumption
Public Good- a good of which one person's consumption does not take away from another person's consumption
Excludable Public Good- a public good that individuals can be excluded (physically prohibited) from consuming
Nonexcludable Public Good- a public good that individuals cannot be excluded (physically prohibited) from consuming
Free Rider- a person who receives the benefits of a good without paying for it
Negative Externality- an adverse side effect of an act that is felt by others
Positive Externality- a beneficial side effect of an action is felt by others
Comprehension/Critical Thinking and Writing
1. William Bradford claimed that private property, in lieu of common property, saved the Plymouth colony from failure and starvation. On what was this belief based? Do you agree or disagree? Why?
William Bradford was the governor of the Plymouth Colony. He stated that the Pilgrims and others living in the colony should own their own land. He thought that they would take better care of their land and be more responsible if everyone had their own land to run. He said that the Pilgrims would want to work harder to take care of their land because they were doing it for themselves and their families, not the whole community. Also, in addition to helping their families instead of everyone, the head of the house was given an incentive to take care of their property. Also, in owning their own land, families could produce as much or as little as their family needs instead of producing for the community. The Pilgrims also felt a sense of ownership. With private property being put into play, things ran much smoother. I agree with Bradford 100%. People are unwilling to work in the modern world unless the person doing the work benefits directly from it. So, if someone had to work for others and the person working did not get anything from their effort, then they would be unwilling to work or take care of anything. This is still true today with many areas around the world adopting the idea of private property.
http://www.hoover.org/publications/digest/3507051.html
Free Enterprise
Jamie Ramseyer Mason Elias Mr. Treadway |Period 3
Overview The chapter "Free Enterprise" how an economy answers the three economic questions. Also, it discusses the five features of free enterprise. It also shows the circular flow of economic activity and how the government, businesses, and households interact with one another. It also tells about profit and loss and how in a free enterprise economy will do whatever it takes to make profit, and loss will destroy an economy. It talks about ethics such as what is good or bad, wrong or right, or characteristics of judging an economy on ethics. It discusses entrepreneurs and how they explore new ways of doing things and how they must take risk to get reward.
Key Terms
Private Property- any good that is owned by an individual or a business
Public Property- any good that is owned by the government
Household- an economic unit of one person or more that sells resources and buys goods and services
Circular Flow Of Economic Activity- the economic relationships that exist between different economic groups in an economy
Profit- the amount of money left over after all the costs of production have been paid. Profit exists whenever total revenue is greater than total cost
Loss- the amount of money by which total cost exceeds total revenue
Ethics- the principles of conduct, such as right and wrong, morality and immorality, good and bad
Entrepreneur- a person who has a special talent for searching out and taking advantage of new business opportunities
Contract- an agreement between two or more people to do something
Private Good- a good of which one person's consumption takes away from another person's consumption
Public Good- a good of which one person's consumption does not take away from another person's consumption
Excludable Public Good- a public good that individuals can be excluded (physically prohibited) from consuming
Nonexcludable Public Good- a public good that individuals cannot be excluded (physically prohibited) from consuming
Free Rider- a person who receives the benefits of a good without paying for it
Negative Externality- an adverse side effect of an act that is felt by others
Positive Externality- a beneficial side effect of an action is felt by others
Comprehension/Critical Thinking and Writing
1. William Bradford claimed that private property, in lieu of common property, saved the Plymouth colony from failure and starvation. On what was this belief based? Do you agree or disagree? Why?
William Bradford was the governor of the Plymouth Colony. He stated that the Pilgrims and others living in the colony should own their own land. He thought that they would take better care of their land and be more responsible if everyone had their own land to run. He said that the Pilgrims would want to work harder to take care of their land because they were doing it for themselves and their families, not the whole community. Also, in addition to helping their families instead of everyone, the head of the house was given an incentive to take care of their property. Also, in owning their own land, families could produce as much or as little as their family needs instead of producing for the community. The Pilgrims also felt a sense of ownership. With private property being put into play, things ran much smoother. I agree with Bradford 100%. People are unwilling to work in the modern world unless the person doing the work benefits directly from it. So, if someone had to work for others and the person working did not get anything from their effort, then they would be unwilling to work or take care of anything. This is still true today with many areas around the world adopting the idea of private property.
http://www.hoover.org/publications/digest/3507051.html
