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21 Cards in this Set

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