Term
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Definition
| the way a society uses its scarce resources to satisfy its people's unlimited wants |
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Definition
| form of economy in which the government decides what goods and services will be produced, how they will be produced, and how they will be distributed. |
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Definition
| an economic system in which individual choice and voluntary exchange direct economic decisions |
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Definition
| economic system in which people produce and distribute goods according to customs handed down from generation to generation |
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Term
| advantages of traditional economies |
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Definition
clearly answers who will produce, what will be produced, and who gets it
little disagreement over economic goals and roles |
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Term
| disadvantages to traditional economy |
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Definition
| methods not efficient, low productivity, low standard of living |
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| centrally planned economy |
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Definition
| system in which central government officials make all economic decisions |
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Term
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Definition
| economic system in which the government owns some or all of the factors of production |
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Definition
| economic system in which the government owns all of the factors of production and there is little or no political freedom |
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Definition
| system that requires absolute obedience to those in power |
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Term
| advantages of a command economy |
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Definition
| provides for everyone and can make unprofitable items |
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Term
| disadvantages of a command economy |
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Definition
| little understanding of local conditions, little motivation to improve productivity, no incentive for workers to use resources wisely, shortages, individual rights curtailed |
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Term
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Definition
| the rights of individuals and groups to own property |
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Term
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Definition
| everything that an individual owns |
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Term
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Definition
| any place where people buy and sell goods and services |
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Term
| fundamentals of a market economy |
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Definition
| private property and markets, limited government involvement, voluntary exchange in markets, competition and consumer sovereignty, specialization and markets |
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Term
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Definition
| principle that the government should not interfere in the marketplace |
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Term
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Definition
| economic system that is based on private ownership of the factors of production |
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Term
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Definition
| a trade in which both traders believe that what they are getting is worth more than what they are giving up |
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Term
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Definition
| financial gain that a seller makes from a business transaction |
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Term
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Definition
| all the actions sellers, acting independently, do to get buyers to purchase their products |
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Definition
| idea that consumers have ultimate control over what is produced because they are free to buy what they want and reject what they don't want |
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Term
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Definition
| situation in which people concentrate their efforts in the activities that they do best |
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Term
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Definition
| tool economists use to understand how market economies operate |
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Term
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Definition
| market where goods and services are bought and sold |
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Term
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Definition
| market for the factors of production--land, labor, capital and entrepreneurship |
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Term
| advantages of market economies |
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Definition
| economic and political freedom, profit motive, competition |
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Term
| disadvantages to market economies |
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Definition
| no mechanism for providing public goods and services due to lack of profit. Unequal distribution of wealth and no care for jobless. |
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Term
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Definition
| economic system that has elements of traditional, command, and market economies |
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Term
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Definition
| changing from private ownership to public ownership |
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Term
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Definition
| change from government or public ownership to private ownership |
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Term
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Definition
| all the economic interactions that cross international boundaries |
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Term
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Definition
| another name for capitalism, based on private ownership of productive resources |
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Term
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Definition
| ability of everyone to take part in the market of free choice |
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Definition
| situation in which everyone has the same economic rights under the law |
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Term
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Definition
| a situation in which people decide which legal agreements to enter into |
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Term
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Definition
| force that encourages people and organizations to improve material wellbeing from economic activities |
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Term
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Definition
| money left over after costs of producing a good or service have been subtracted from the revenue gained by selling the good or service |
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Term
| modified free enterprise economy |
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Definition
| free enterprise economic system with some government involvement |
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Term
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Definition
| occurs when people who are not a part of a marketplace interaction benefit from it or pay part of its costs |
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Term
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Definition
| products provided by federal, state and local governments, and consumed by the public as a group |
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Term
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Definition
| a person who avoids paying for a good or service but benefits from that good or service anyway |
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Term
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Definition
| all the goods and services that are necessary for the functioning of society |
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Term
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Definition
| side effect of a product that affects someone other than the producer or the buyer |
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Definition
| externality that imposes costs on people who were not involved in the original activity |
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Term
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Definition
| externality that creates benefits for people who were not involved in the original economic activity |
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Term
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Definition
| government payment that helps cover the cost of an economic activity that has potential to benefit the public as a whole |
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Term
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Definition
| government programs designed to protect people from economic hardship |
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Term
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Definition
| transfer payment in which the government transfers income from taxpayers to recipients who do not provide anything in return |
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Term
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Definition
| transfers of income from one person or group to another even though the receiver does not provide anything in return |
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Term
| Trends in modern economies |
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Definition
| changes in ownership, increasing global ties |
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Term
| What are the requirements of free enterprise systems? |
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Definition
| Legal equality, open opportunity, free contract |
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Term
| What motivates people to start a business? |
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Definition
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