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Economic decision maker (Household [single decision makers] (Household are…
Economic decision maker
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Firms
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Type of firms
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Corporation
Each member has only limited liability; easier to raise funds; limited decision-making of owner; income have take twice tax
Sole Proprietorship
Single owner, easier to bankrupt
Cooperatives
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Market cooperative
Workers which are the owners shared all profits and lost, and make decisions together
Role of government
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In market
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Deal with Externalities
Government use taxes, subside and regulation to align private and public benefit and cost
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Rest of the world
Include the household, firms and government in other countries
International trade
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Trade
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If the opportunity cost is same, there is no advantage