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53 Cards in this Set
- Front
- Back
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what are the 2 types of economics in the world? |
-microeconomics -macroeconomics |
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the study of the economy as a whole? |
macroeconomics
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the study of individuals, families,and businesses |
microeconomics
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studies economic behavior as it is |
positive economics |
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involves judgement of what economics behavior ought to be |
Normative economics |
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a way a society uses its scarce resources |
economic system |
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3 basic types of economic systems |
- traditional economies -command economies -market economies |
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an economic system in which families,clans, or tribes make economic desicions |
traditional economy |
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an economic system in which the government decides what goods and services will be produced |
Command economy |
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an economic system based on idividual choice |
Market econonomy |
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who acts in their own self-interest when they make economic choices? |
individuals |
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who was born in scotland that taught literature,logic,and moral philosophy? |
Adam Smith |
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In what did smith challenge the ideas of mercantilism being economically sound? |
his book "Wealth of Nations" |
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what is a system by which the government of the homeland controlled trade with its colonies? |
Mercantilism |
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What guides the marketplace? |
an "invisible hand" |
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what economy clearly answers the 3 economic questions? |
traditional economies |
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what are systems of distrubtion determined by? |
custom or tradition |
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members of the central government make all economic decisions? |
centrally planned economy |
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economic system in which the government owns some factors of production |
socialism |
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economic system in which the government owns ALL factors of production |
communism |
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what system requires absolute obedience |
authoritarian system |
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what is established through the democratic political process |
democratic socialism |
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why was marx exiled from his homeland? |
became involbed in radical politics |
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marx and engels laid out ideas of worker overthrow in the book called what? |
"The Communist manifesto" |
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2 features of a market economy? |
- private property rights -market |
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the rights of individuals and groups to own businessess |
private property rights |
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is any place where people buy and sell goods |
market |
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what is vital to any single sale or exchange? |
clear ownership |
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government should Not interfere in the economy |
laissez faire |
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an economic system that is based on PRIVATE OWNERSHIP of the factors of production |
capitalism |
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a market economy in its pure form |
laissez faire capitilism |
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a trade in which both traders believe |
voluntary exchange |
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what does self-interest guides? |
voluntary exchange |
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is considered a financial gain from a business transaction |
profit |
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effort of two or more people acting independently |
competition |
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a tool used to understand how market economies operate |
circular flow model |
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what 2 key economic decisions does the cicular flow model make? |
households and businessess |
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the market for goods and services |
product market |
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idea that bc consumers are free to purchase what they want and refuse products they dont |
consumer sovereignty |
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a situation in which people concentrate their efforts |
specialization |
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removes the need for households to be self-sufficient |
specialization |
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a key feature of the market economy, ensures that resources will be allocated |
the profit motive |
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incentives to come up with good ideas is related to another advantage of a market economy: |
competition |
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what is the primary focus in a pure market economy? |
the economic good of the individual |
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what is the most common type of economic system today? |
mixed economy |
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an economy that has element of traditional, command, and market systems. |
mixed economy |
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what kind of social benefit does swedish citizens recieve? |
"cradle to grave" |
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what means to change from private ownership to government or public ownership? |
nationalize |
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what means to change from government or public ownership to private ownership? |
privatize |
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what helps to privatize an industry? |
open it up to foregin investors |
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what has been enhanced by cross-border business partnerships? |
globalization |
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what refers to all the economic interactions that cross international boundaries? |
the global economy |
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what is the economic tie between nation an example of? |
global economy |
