Barter – exchanging goods and services for other goods and services without using money

Economy – an area intended for the production, distribution, exchange and consumption of goods and
services by different agents

Value – the subjective worth or importance placed on a good or service

Utility – measure of usefulness of a good or service

Credit – trust based payement not made at the time of purchase, but rather payment at a later time or
series of installments

Mint – place generally administered by the state in which metal coins are imprinted for use or storage

Check – written, dated and signed instrument which directs a bank to pay a specific sum of money to the
receipent

Neolithic revolution – first wide-scale transition of human beings to a lifestyle centered around
permenant settlement once agriculute had been discovered and utilized. It also began an era in which
agriculture became most common form of currency

Liability – measure to which an individual or group is responsible for something – especially by law

Bank of England - financial institution established in 1694 that helped provide a stable state currency as
well as investment, borrowing and savings oppurtunities

Natural rights – rights that are endowed to all individuals universally, regardless of the given societal,
political, legal or economic structure in which one resides

Profit – a financial gain, especially the difference between the amount earned and the amount spent in
buying, operating or producing something

Enclosure- The gradual process of accumulating private property, along with the fencing off of land for
commercial agriculture, the practice began as early as the 13 th century

Liberty – the state of being free within society from oppressive restrictions imposed by authority on
one’s way of life, behavior and political views

Incentive – the internal or external drive that motivates or encourages one to do something

Corporation – company or group authorized to act as a single entity (legally a person) and recognized as
such by law
Joint Stock – Investment technique in which shares of a company’s stock can be bought and sold by
shareholders

Private property – under this doctrine, individuals are able to accumulate land and other materials for
their own private use; these rights are protected and enforced by the law
Short Answer:

How did mercantilism and command economies negatively impact economic growth in the Middle Ages?

Mercantilism- belief that there is a finite amount of goods in the world. Kings in the middle ages
believed this, so instead of creating trade relationships with other countries, they would create
high tariffs on foreign goods, so people would be forced to buy goods from their own country.
This led to high prices, low consumption, and little growth and progress.

Command economies – central group that controls production prices, income in an economy. City
govenrments created craft guilds in the middle ages, that controlled all production, set prices etc.
But that also meant people could not innovate and go out on their own, so there was no
incentive to improve. This also was the reason for the 1000 years of non existent economic
growth in the middle ages.

How does the “free lunch” concept relate to opportunity cost?

Opportunity costs describe the true cost of an item by factoring in what you gave up or cannot
buy if you buy that item. Free lunch illustrates this concept because the idea of a free lunch does
not exist. Even if someone does not pay the bill at the end of the lunch, they have paid in other
ways, such as their time. It has cost you the opportunity to do something else.

How did John Locke’s ideas lead to the enclosure process, and how did enclosure prompt urbanization?
How did the Industrial revolution benefit from urbanization?
John Locke believed people are born with natural rights: life, liberty and the pursuit of happiness.
Everyone was a blank slate, they were not naturally born deserving land. Others picked up this
idea and started promoting the idea of private property, that someone could own their land.
People started putting up fences and creating enclosures of land, sectioning off where their farm
began, and trying to become successful farmers and commercialize their agriculture. This created
a middle class, where people worked for their wealth instead of just sitting back and having serfs
work for it.
But for serfs, this meant that their common land was taken away from them. Many moved to
cities to try to find work and make clothes/goods themselves. This movement was urbanization,
and when peasants began to sell goods and commercialize this prompted industrialization.

In ancient times, what replaced grain as the favored currency and why? What was the benefit of this new
currency?
State minted coins replaced grain as the favored currency in ancient Persia, because it was hard
to store large amounts of grain to pay soldiers, as it would go bad and was consumable. Instead,
they melted down looted treasure. The benefit of standard coins was that they were easier to
carry and more standard than grain, so Persia’s economy flourished and it was easier to engage in
trade