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33 Cards in this Set

  • Front
  • Back
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The method used by a society to produce and distribute goods and services.
Economic System
A society's ________ ________ is determined by its goals and values.
Relies on habit, custom,or ritual to decide questions of production and consumption of goods and services.
Traditional System/Economy
Ex. The Amish, Quakers, African Tribesmen use custom, ritual, & habit to decide the 3 Economic Questions.
Decisions on production and consumption of goods and services are based on voluntary exchange in markets.
Market System/Economy
The U.S.A. has a Mixed-Market Economy based on exchange/trade and called Free Market or Capitalism.
The Central Government makes all decisions on the production and consumption of goods and services
Command/Centrally-Planned System/Economy
The Central Government owns all Factors of Production
Market-based economic systems in which government plays a limited role (U.S.A.) or a major role (China)
Mixed System/Economy
The U.S is a Mixed-Market
China is a Mixed-Command Economy/System
The financial gain made in a transaction.
Profit
Profit is made by buying stocks at cheap shares and selling them at high shares
The ultimate user of a commodity/good.
Consumer
The purchaser of a good/service.
The level of Economic prosperity one has
Standard of Living
Raised by Innovation, Technology and Training
The love of one's country; the passion that inspires a person to serve his/her country
Patriotism
Shown by military service, protection of its rights & maintaining its laws and institutions
An arrangement that allows buyers and sellers to exchange things
Market
A Farmer's Market allows for the exchange of produce for consumer's money
An organization that uses resources to produce a product, which it then sells.
Firm
______transform "inputs" or factors of production into "outputs" or products.
A person/group of people living in the same residence
Household
_________ own the Factors of Production: land, labor & capital and are the consumers of goods and services.
The market in which HHs purchase the goods and services that firms produce
Product Market
Goods & services that firms produce are purchased by HHs
Firms purchase the factors of production from Households: Land/Natural Resource, Labor: Workers paid wages/salaries for their work, and borrow money from households to purchase capital, paying HHs interest or profits in return
Factor Market
The lower half of the circular flow diagram. Land, Labor & Capital are purchased by Firms
Adam Smith, a Scottish Philosopher explained the Market Economy by laissez faire or "leave alone" as it will self-regulate w/o use of Gov't intervention
The Invisible Hand
Our Economy regulates itself by competition and self-interest. Land, Labor & Capital are Factors of Production that generate a nation's wealth.
Individual pursuit of what is best for him/her & making decisions that ultimately benefit the whole nation
Self-Interest
consumers purchase goods in their self-interest and sellers compete with one another for their business.
The struggle among producers for the dollars of consumers; the rivalry among sellers to attract customers while lowering costs
Competition
________ provides consumers with the choice of a larger variety of goods; mostly at reasonable prices.
The power of consumers to decide what gets produced.
Consumer Soverignty
Since producers have incentives to meet consumers' desires, the consumer therefore decides what gets produced.
An expectation that encourages people to behave in a certain way
Incentive
An ____________ may be cash back, extended warranty, free gas for a period of time, etc.
for purchasing a car.
The doctrine that states that government generally should not intervene in the marketplace
Laissez Faire
Left to its own devices, the free market system is felt to provide the most benefit for consumers and raise the standard of living
Property owned by individuals or companies, not by the government or the people as a whole
Private Property
You cannot hunt on ______ ______ without the landowners permission.
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
Free Enterprise
Also called Capitalism
A range with no clear divisions.
Continuum
Mixed economies have less clear divisions & overlap making them a ___________
Period of change in which an economy moves away from a centrally planned economy toward a market-based system.
Transition
Ex. the U.S.S.R. & China have become slowly westernized in a ________ from communism/socialism to more free enterprise with some privatisation of industry
To sell state-run firms to individuals
Privatize
Economic transition requires that governments give up control and _____________ industry
System in which the central government makes all decisions on the production &
consumption of goods & services
Socialism
This system requires a high degree of central planning to achieve economic equality.
Ex. transition of U.S.S.R to Russia
A Centrally-planned/Command economy with all economic and political power resting in the hands of the Central Government.
Communism
Cuba, North Korea, and China have __________ governments
Requiring strict obedience to an authority, such as a dictator.
Authoritarian
Disallowing individual freedoms to its citizens
A large farm leased from the
state to groups of peasant farmers
Collective
Farmers recieved a share or a cash from the sale of produce
Industry requiring a large capital investment and produces items used in other industries.
Heavy Industry
Joseph Stalin created his 5-year plans to produce ________
_________ in the U.S.S.R.
The concentration of the productive efforts of individuals and firms on a limited number of activites
Specialization
Assembly-line production requires much specialization
The income people recieve from supplying factors of production; land, labor, capital, technology or entrepreneurship
Factor Payments
Ex. landowners recieve rent, workers recieve wages those who lend money, buy machinery or build factories receive interest psyments.
Government programs that protect people expeienceing unfavorable working conditions
Safety Net
Ex. Injured workers recieve Workmans Comprehensive insurance, layoffs can get Unemployment Ins., those in Natural disasters can get FEMA, retired persons can get SSI payments, et. al.