… profit motive, open opportunity, legal, equality private property rights, free contract, voluntary exchange, and competition
…giving the consumer the freedom to make their own economic choices and produces to tell them what to produces and how much to make of it.
…public disclosure laws , environmental protection, consumer protection, and governmental regulations.
usual length of the business cycle:
…less then a year or many years
three main outcomes of public policy aimed at economic stability:
…High employment, steady growth, and stable prices.
requirement for raising living standards for new generations:
…economy grows enough to provide additional goods and services
two indicators of economic stability
…. steady prices, health of financial institutions.
government-provided incentives for innovation
…funding of research and development projects, operation of government research institutions, granting of patents and copy rights.
what is an example of something that self-interest would not motivate consumers to provide?
… an efficient highway system
why might this public good be unreasonable to expect from private providers?
… profit incentives would not motivate private builders to construction
how does this factor relate individual?
…the benefit to each individual must be less then the cost each would pay if it were provided privately
how does this factor relate to the society
…the total benefits to society must be greater than the total coat
what is an example of a positive side effect?
….training and education benefits- people work of cleaning up rundown properties help raise property vaules
what is an example of negative side effect?
…community may have to pay for clean-up cost for pollution by a company.
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