Term
Factor of Economic Production:
Land |
|
Definition
| Created Resources upon which the principle of stewardship operates |
|
|
Term
Factor of Economic Production:
Labor |
|
Definition
| That which is utilized to convert created resources into useful wealth |
|
|
Term
Factor of Economic Production:
Capital |
|
Definition
| Produced means of production |
|
|
Term
| Basis of the Free Market System |
|
Definition
| Ownership of private property. It is warranted in Scripture in the commands against theft and covetousness |
|
|
Term
| Two-fold Nature of property |
|
Definition
Internal: thoughts, conscience, will, intellect, creative mental energies, emotions; these comprise personality and God's image of man
External: body and physical capacities as well as labor and productive potential |
|
|
Term
| Madison's article "Property" |
|
Definition
Madison expounded a definition of property that included Blackstone's but amplified it to incorporate property's internal dimensions. Civil government is a servant of mankind to protect property in all forms.
Conscience is the most sacred of all property. |
|
|
Term
|
Definition
| Good steward husbands property and causes it to produce so that it yields properly. Property is a trust to be exercised in faithful stewardship to God |
|
|
Term
| Dynamics of the Free Market |
|
Definition
| Competition; results in quality production in greater levels; Free Market requires voluntary exchange, as well. |
|
|
Term
| Two Characteristics of Competition |
|
Definition
1. Competitive market is one in which there are large numbers of buyers and sellers acting independently apart from coercion in an environment of free exchange
2. Competition requires the business focus to be upon the consumers, which helps to provide better goods and lower prices |
|
|
Term
| Two Reasons Competition Exists |
|
Definition
1. Consequence of Economic Scarcity; people prize something not readily available. Increases in demand occur when supply is low. Producers are drawn in to meet demand
2. Absence of Central Economic Planning; no fair price system |
|
|
Term
| Three Consequences of Competition |
|
Definition
1. More efficient use of capital and labor
2. Raises or elevates the quality of products
3. Lowers the price of products; scarce monetary resources are distributed to other market sectors |
|
|
Term
| Relationship between Competition and Scarcity |
|
Definition
| Competition overcomes scarcity by increasing the availability of products; results in production sufficient to meet consumer demands |
|
|
Term
| Profit, and it's relation to the Market |
|
Definition
Profit is the incentive for investment
It guides the factors of production in accordance with demand,
It solves shortages quickly and provokes greater levels of economic efficiency
It makes a more efficient use of property
It is calculated by relating costs to prices |
|
|
Term
|
Definition
Fallacy of Overlooking Secondary Consequences
This is when bad economists focus on the immediate good and the direct consequences of a proposed course of action when, instead, they should look beyond and examine the longer and indirect consequences of a given policy |
|
|
Term
| Market Produces and is Based off of Selfishness. What is the counter? |
|
Definition
| Market does not require selfishness and selfishness is not synonymous with self-directed action. One can be selfish in any system, and the market, in fact, restrains selfishness for the sake of relationships |
|
|
Term
| Market Fosters Materialism. What is the counter? |
|
Definition
| Materialism is not unique to the system or foundational to it |
|
|
Term
| Market Fosters Impersonalism and Individualism. What is the counter? |
|
Definition
| Economic freedom does not "cause" impersonal relationships.The market allows individuals to transact personally and not just economically. It is not inherently impersonal or non-community oriented. |
|
|
Term
| Economic Power results from the Market as more powerful competitors are "free to oppress" and exploit weaker competitors. What is the counter? |
|
Definition
| These sorts of behaviors are not fostered or demanded by the system. They exist everywhere. |
|
|
Term
| Immorality impacts the market. What is the counter? |
|
Definition
| This occurs when the seller inspires the government to prevent competitors from having legal and economic right to offer something better. Using the government to secure special interest is selfish! |
|
|
Term
| Role of Civil Government relative to the Economy |
|
Definition
1. Protection of individuals from coercive methods originating with fellow citizens
2. Administration of justice or just procedure in the market
3. Facilitation of voluntary exchanges through established agreed-upon economic rules; such as what it means to own or posses private property or cut contracts
4. Rectification of third party effects; people not party to your exchange and involuntary exchanges
5. Protection of individuals who are not considered "responsible." |
|
|
