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21 Cards in this Set
- Front
- Back
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Command economic system |
relies on planners directed by government, to decide what and how to produce |
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transitional economy |
government is liberalising some sectors so that decisions can be made by companies based on supply and demand rather than by state-employed planners |
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mixed economy |
economy with both public and private sectors |
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public sector |
areas of economic activity that are directly controlled by the state |
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free market economy |
one where activity is directed by entrepreneurs and private organisations rather than the state |
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market forces |
when conditions of supply and/or demand change in a market (leading to price changes |
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entrepreneurs |
people who take responsibility for organising business activity and carry business risks |
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profit |
the gain from operating business when sales revenue earned is greater than costs incurred |
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scarcity |
in all economies individual needs wants always exceed the availability of resources to provide them (choices must be made) |
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choice |
involves deciding on priorities in the light of what can be afforded. what consumers are willing and able to buy at a given price level and a given time |
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consumer sovereignty |
A theoretical attraction of free markets is that consumers ultimately control the allocation of resources. The real extent of consumer sovereignty is restricted in a number of ways. |
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effective demand |
the combination of desire for a product with the ability to pay |
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tastes |
consumer preferences |
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substitutes |
THE ALTERNATIVES TO A PRODUCT |
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complementary goods |
tend to used together ('complement' each other) |
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income |
the flow of money received by an individual or household over time. |
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population |
a group of people fitting a particular description, from the national population |
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price |
the money plaid by the the buyer to the seller in a transaction |
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demand curve |
graphical representation of the relationship between quantity demanded and price for a product in a market |
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supply curve |
a graphical representation of the quantities businesses will supply to a market at different price levels |
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incentive |
a reward which stimulates activity |
