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21 Cards in this Set
- Front
- Back
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Economics
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the study of how people seek to satisfy their needs and wants by making choices
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Macroeconomics
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the study of the behavior and decision making of entire economies
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Microeconomics
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the study of the economic behavior and decision making of small units, such as individuals, families and businesses
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Economic System
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the method used by a society to produce and distribute goods and services
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Goods
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physical objects such as shoes and shirtsp
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Services
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actions or activities that one person performs for another, haircuts, dental checkups
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Incentive
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an expectation that encourages people to behave in a certain way
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Production Possibilities Curve
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a graph that shows alternative ways to use an economy's resources
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Standard of Living
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level of economic prosperity
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Traditional economy
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economic system that relies on habit, custom or ritual to decide questions of production and consumption of goods and services
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Market economy
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economic system in which decisions on production and consumption of goods and services are based on voluntary exchange in markets
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Command economy
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economic system in which the central government makes all decisions on the production and consumption of goods and services
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Mixed economy
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economic system that combines tradition and the free market with limited government involvement
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Invisible Hand
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term economists use to describe the self-regulating nature of the marketplace
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Consumer Sovereignty
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the power of consumers to decide what gets produced
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Laissez Faire
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the power of consumers to decide what gets produced
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Continuum
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a range with no clear divisions
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Circular Flow Model
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shows the interactions between households and businesses in the free market
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Product Market
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the market in which households purchase the goods and services that firms produce
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Factor Market
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market in which firms purchase the factors of production from households
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Factors of Production
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land, labor and capital; the three groups of resources that are used to make all goods and services
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