ECON 101 Chapter Notes - Chapter 1: Market Failure, Market Power, Externality
Document Summary
Principle 7 - government can sometimes improve market outcomes. Property rights: the ability of an individual to own and exercise control over scarce resources. Property rights ensure that producers are incentivized to actually produce stu without fear of it being taken by force. Market failure: a situation in which the market fails on its own to properly distribute resources. Externality: the impact of one person"s actions on the well-being of a by-stander. Market power: the ability of a form or individual to unduly in uence market prices. Principle 8: a country"s standard of living depends on its ability to produce goods and services. Almost all variation in living standards comes from di erences in productivity. Principle 9: prices rise when the government prints too much money. In ation: an overall increase in the prices in a market. The main culprit of in ation is almost always large quantities of money.
