3 central features of capitalism - Correct Answer ✔✔ - wage labor
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private ownership of the means of production (land, labor, capital)
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production for exchange and profit mn mn mn mn
what shapes attitudes about business firms? - Correct Answer ✔✔ - standard of living
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decentralized decision making mn mn
allocation of resources mn mn
self interest mn
inequities in society mn mn
business cycle mn
business wrongdoing mn
globalization
unemployment
innovation
the media mn
government
what does business require to operate? - Correct Answer ✔✔ - legitimacy
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-the belief in the rightness of an institution
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social license mn
-the privilege of operating in society with consent by public
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Key assumptions of capitalism - Correct Answer ✔✔ - Private property, individualism,
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economic freedom, equality of opportunity, competition, profit, work ethic, consumer
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sovereignty, role of government
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Private property - Correct Answer ✔✔ - Capitalism assumes that property can be owned by
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an indivdual
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Individualism - Correct Answer ✔✔ - The individual and not society is the paramount mn mn mn mn mn mn mn mn mn mn mn mn mn mn
decision maker
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Economic freedom - Correct Answer ✔✔ - Few restrictions on business activity
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-freedom to voluntarily enter business mn mn mn mn
-enter contracts mn
-locate anywhere mn
How economic freedom is measured - Correct Answer ✔✔ - Property rights
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Taxation
Government intervention mn
Regulation
, Corruption
International exchange mn
Foreign investment mn
Inflation
Wage and price controls mn mn mn
Equality of opportunity - Correct Answer ✔✔ - assumption that all individuals/groups have
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an even chance at responding to some condition in society
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Competition - Correct Answer ✔✔ - many rival sellers seek to provide good and services to mn mn mn mn mn mn mn mn mn mn mn mn mn mn mn mn
many buyers
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-adv: more variety, lower prices
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profit - Correct Answer ✔✔ - the "profit motive"
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work ethic - Correct Answer ✔✔ - code of values claiming that work is desirable, it is a
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natural activity
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Role of government - Correct Answer ✔✔ - In a perfect capitalist market, government
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interaction would be virtually non-existent
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The automobile industry - Correct Answer ✔✔ - explosion of automobile manufacturing
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brought together steel, oil, rubber and paint industries. created economic interdependence
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effects of 3 technological breakthroughs - Correct Answer ✔✔ - urbanization
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-farm to city shift mn mn mn
interdependence mn
-specialization created economic interdependence mn mn mn
sociological effects mn
-shifts in the nature of work mn mn mn mn mn
mass production - Correct Answer ✔✔ - time required to assemble an engine dropped
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because of specialization and division of labour
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economies of scale - Correct Answer ✔✔ - as cars became faster to produce, they became mn mn mn mn mn mn mn mn mn mn mn mn mn mn mn mn
cheaper to produce
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rise of big business - Correct Answer ✔✔ - change in competition
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threat of monopolies mn mn
emergence of the corporation mn mn mn mn
threat of monopolies mn mn
rise of antitrust legislation
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-makes sure industries can't have monopolies mn mn mn mn mn
-ensures competitions mn