Economics: Unit 1 Test

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Economics: Unit 1 Test

Economics:  Unit 1 Test Vocabulary 

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Most societies try to maximize what they can get for the resources they have to work with
Fewer resources than the economy is capable of using
Invisible Hand 
Term used by Adam Smith to describe the natural force that guides free market capitalism through competition for scarce resources. According to Adam Smith, in a freemarket each participant will try to maximize self-interest, and the interaction of market participants, leading to exchange of goods and services, enables each participant to be better of than when simply producing for himself/herself
Dialectic of History 
Cycle of destruction & creation 
Surplus Value
Human labour was the source of economic value. The capitalist pays his workers less than the value their labour has added to the goods, usually only enough to maintain the worker at a subsistence level. Of the total worth of the worker’s labour, however, this compensation, in Marxian theory, accounts for only a mere portion, equivalent to the worker’s means of subsistence
The method of taking away an individual's property