UNC-Chapel Hill ECON 101 - 2. August 21 (3 pages)

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2. August 21



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2. August 21

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Pages:
3
School:
University of North Carolina at Chapel Hill
Course:
Econ 101 - Introduction to Economics

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Washburn 2 August 21 2014 Econ 101 Turchi o What does an economy system need to do to be successful o Has to ask and answer 3 Questions Coordination Tasks o What needs to be produced o How will these things be produced o How much should be distributed to each member of the economy o Who gets what and how is that determined o Three major actors o Households o More than just demanders of goods and services o Can also be suppliers workers offer land have capital o Thought of as a single person in the course o Can be a mistake one getting higher up o Makes 2 Decisions o How to spend money o What to buy o How much to buy o How to sell rent the resources that the household has o Labor o Can own the land or the capital o Business firms o Makes the decision about what gets produced how much and in which ways how o Businesses will act to maximize profits o Not always about o Turns inputs into outputs o What other goals could there be o Central Authorities governments o All types and levels o Federal State Local city water basin o Not always cooperative with other governments o Federal Reserve fights with Congress o Market An area over which buyers and seller debate over the sale of goods and services o Online marketplaces everywhere and nowhere o Black markets all over not just one location o International market for foreign exchange o Place for money to be exchanged between currencies o Product Market o The goods will be used by the customer not resold o Factor Market o Market for factors of production o Inputs o Labor Washburn o o o o o o o Steel o Lumber o Electricity A product can be a good for one consumer and a factor for another Market Economy An economy that contains many markets o Opposite is Command Economy Command Economy The central authority answers the 3 questions not private businesses Free Market Economy bulk of decision are made by actors in the market themselves Capitalist Economy The means of production are owned by the private sector not a central



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