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32 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Economic system |
The method used by a society to produce and distribute goods and services |
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Factor payments |
The income people receive for supplying factors of production such as land, labor, or capital |
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Safety net |
Government programs that protects people experiencing unfavorable economic conditions |
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Standard of living |
Level of economic prosperity |
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Traditional economy |
Economic system that relies on habitat, custom, or ritual to decide questions of production and consumption of goods and services |
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Market economy |
Economic system in which decisions on production and consumption of goods and services are based on voluntary exchange in markets |
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Centrally planned economy |
Economic system in which the central government makes all decisions on the production and consumption of goods and services |
A.k.a. command economy (Central authority is in COMMAND of the economy) |
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Mixed economy |
Economic system that combines tradition and the free market with limited government involvement |
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Market |
And arrangement that allows buyers and sellers to exchange things |
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Specialization |
The concentration of the productive efforts of individuals and firms on a limited number of activities |
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Invisible hand |
Time economists use to describe the self-regulating nature of the marketplace |
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Consumer sovereignty |
The power of consumers to decide what gets produced |
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Laissez Faire |
"Let them do as they please" Government must leave individuals as free as possible to pursue their own interest if a market economy is to run smoothly |
"Fairly lazy" |
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Socialism |
Social and political philosophy based on the belief that democratic mean should be used to evenly distribute wealth throughout a society |
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Communism |
A political system characterized by centrally planned economy with all economic and political power resting in the hands of the central government |
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Authoritarian |
Requiring strict obedience to an authority, such as a dictator |
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"The Communist Manifesto" |
By Karl Marx and Friedrich Engels introduce their socialist philosophy (1848) |
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Collectives |
Large farm released from the state to groups of peasant farmers |
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Heavy industry |
Industry the requires a large capital investment and that produces items used in other industries |
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Household |
A person or group of people living in the same residence |
Own factors of production Consumers |
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Firm/business |
An organization that uses resources to produce a product, which it them sells |
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Laissez Faire |
"Let them do as they please" The doctrine that states that government generally should not intervene in the marketplace |
"Fairly lazy" |
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Profit |
The financial gain made in a transaction |
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Product market |
The market in which household purchase the good services that firms produce |
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Adam Smith |
Scottish social philosopher (1776) Published "The Wealth of Nations" |
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Self-interest |
One's own personal gain |
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Incentive |
An expectation that encourages people to behave in a certain way |
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Competition |
The struggle among producers for the dollars of consumers |
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Free enterprise |
An economic system characterized by private or corporate ownership of capital goods; investments that are determined by private decision rather than by state control; and determined in a free-market |
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Continuum |
A range with no clear divisions |
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Transition |
Period of change in which an economy moves away from a centrally planned economy toward a market-based system |
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Privatized |
To sell state-run firms to individuals |
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