ISS 210 Lecture Notes - Lecture 12: Capitalism
29 Apr 2018
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ISS210 - Lecture 12: Power in Economics - Chapter 8
Learning Objectives:
● After reading this chapter, you should be able to:
○ Understand the key theories of how governments can exercise power in the
economic system
○ Describe the tools that governments use to influence the economy
Power and Economic Organization:
● Economics - the study of the production and distribution of scarce goods and services
which decides:
○ What should be protected?
■ Ex.) Should we build more schools or prisons?, Should we build new roads
or cut down on federal deficit?, Should we save money or spend money?
○ How will goods and services be produced?
■ Ex.) land, supply, industries, labor, educational systems
○ For whom will goods and services be produced?
■ Distribution
● Two ways of making those decisions:
○ The market system
○ Collective decision making
The Market System, (Hard Boiled and Impersonal):
● Markets
○ Market - any place or arrangement that enables people to exchange money for
goods, services, or labor.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Iss210 - lecture 12: power in economics - chapter 8. After reading this chapter, you should be able to: Understand the key theories of how governments can exercise power in the economic system. Describe the tools that governments use to influence the economy. Economics - the study of the production and distribution of scarce goods and services which decides: Ex. ) land, supply, industries, labor, educational systems. Market - any place or arrangement that enables people to exchange money for goods, services, or labor. Price - the rate at which money is exchanged for goods and services. Under the private enterprise system, the market determines what is to be protected, how much it will cost, and who will be able to buy it. Consumer demand - preferences for goods and services; willingness of consumers to pay. Profits - the monetary gains that motivate producers to satisfy consumer demand and produce goods and services in the most efficient way possible.
