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CH 3 Vocabulary jw
| Question | Answer |
|---|---|
| another name for capitalism, an economic system based on private ownership of productive resources. | Free enterprise system |
| The ability of everyone to take part in the market by free choice. | Open Opportunity |
| A situation in which everyone has the same economic rights under the law. | Legal equality |
| A situation in which people decide which legal agreements to enter into. | Free contract |
| The force that encourages people and organizations to improve their material well being from economic activity. | profit motive |
| Money left over after the costs of producing a good or service have been subtracted from the revenue gained by selling that good or service. | Profit |
| A free enterprise economic system with some government involvement. | Modified free enterprise economy |
| Occurs when people who are not part of a marketplace interaction benefit from it or pay part of its costs. | market failure |
| products provided by federal, state, and local governments and consumed by the public as a group. | Public goods |
| A person who avoids paying for a good or service but who benefits from that good or service anyway. | free rider |
| Consists of all the goods and services that are necessary for the functioning of society. | infrastructure |
| A side effect of a product that affects someone other than the producer or the buyer. | externality |
| An externality that imposes costs on people who were not involved in the original economic activity. | negative externality |
| An externality that creates benefits for people who were not involved in the orginal economic activity. | positive externality |
| A government payment that helps cover the cost of an economic activity that has the potential to benefit the public as a whole. | Subsidy |
| Consists of government programs designed to protect people from economic hardship. | Safety net |
| Transfers of income from one person or group to another even though the receiver does not provide anything in return. | Transfer payments |
| A transfer payment in which the government transfers income from taxpayers to recipients who do not provide anything in return. | Public transfer payment |
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joannw15
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