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21 Cards in this Set
- Front
- Back
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economic system
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a particular set of instrumental arrangements and a coordinating mechanism
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command system
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government owns most property resources and economic decision making occurs through a central economic plan
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market system
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the private ownership of resources and the use of markets and prices to coordinate and direct economic activity
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private property
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the right of private persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other property
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freedom of enterprise
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ensures that entrepreneurs and private businesses are free to obtain and use economic resources to produce their choice goods and services and sell them in their chosen markets
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freedom of choice
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enables owners to employ or dispose of their property and money as they see fit
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self-interest
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the motivating force of the various economic units as they express their free choices
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competition
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the presence in a market of independent buyers and sellers competing with one another along with the freedom of buyers and sellers to enter and leave the market
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market
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an institution or mechanism that brings buyers and sellers into contact
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specialization
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the use of resources of an individual, firm, region, or nation to produce one or a few goods or services rather than the entire range of goods or services
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division of labor
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specialization of workers
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medium of exchange
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any item sellers generally accept and buyers generally use to pay for a good or service; money
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barter
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swapping goods for goods
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money
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simply a convenient social invention to facilitate exchanges for goods and services
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consumer sovereignty
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determination by consumers of the types and quantities of goods and services that will be produce with the scarce resources of the economy
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dollar votes
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the "votes" that consumers and entrepreneurs cast for the production of consumer and capital goods when they purchase those goods in product and resource markets
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creative destruction
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the creation of new products and production methods completely destroys the market positions of firms that are wedded to existing products and older ways of doing business
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invisible hand
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the tendency of firms and resource suppliers that seek to further their own self-interests in competitive markets to also promote the interests of society
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circular flow diagram
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illustrates the continuous, repetitive flows of goods and services, resources, and money
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resource market
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the place where resources or the services of resource suppliers are bought and sold
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product market
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the place where goods and services produced by businesses are bought and sold
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