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8 Cards in this Set
- Front
- Back
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Economic system
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The institutional means for resolving the problems of resource allocation in an economy
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Resource allocation
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How resources are allocated to address the problem of scarcity i.e. What to produce, how to produce it, and to whom should it go
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Mixed economy
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Where resource allocation is undertaken by state planning and market forces, depending on the product
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Capitalist (free market) economy)
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Where markets determine resource allocation with minimal state intervention
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Command (planned) economy
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Where resources are allocated according to centralised state planning
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Invisible hand
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Where resources are allocated by the decentralised decision making if consumers and producers acting through markets, without and centralised (state) planning
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Consumer sovereignty
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The production of goods is directed by consumer demand
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Laissez faire
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Where government does not intervene with the functioning of markets
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