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19 Cards in this Set
- Front
- Back
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as specialization and interdependence increases, the more important is the development of an ec system to...
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organize and coordinate production and distribution
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why do different types of ec systems evolve?
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in response to the neecd to coordinate activities, respond to the questions of what to produce, how to produce it, and how to allocate what is produced
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market economies
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an ecdonomic system in which the basic questions of what, how, and for whom to produce are resolved primarily by buyers and sellers interacting in markets
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private property rights
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the exclusive right of someone to use a scarce resource or good in whatever manner the think best
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3 requirements for a market economy
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(1) all individuals and companies have private property rights (2) they have the right to freely trade or sell their property to others (3) everybody is allowed to pursue their self-interest (making the biggest profit/receiving the most benefits from each dollar)
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"care takers" in an economy with private property
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the concept that people are more likely to take good care of a resource or good if they know that it is theirs
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another name for market economies
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capitalist or free enterprise economies
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centrally directed (command) economy
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an economic system in which the basic questions of what, how, and for whom to rpoduce are resolved primarily by governmental authority
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how do central directed economies function?
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a central planning commission draws up a master plan, which is then put into effect by national, regional, and local government agencies
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who owns the natural resources and capital goods in a central economy?
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the govt
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who are the workers in a central ec?
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people employed in govt enterprises or in the govenrnment agencies that plan and administer the system
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what is the solution to scarcity in a central ec?
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a formal rationing system or selling on a first come first serve basis
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traditional economies
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an economic system in which the basic questions of what, how, and for whom to produce are resolved primarily by customs and traditions
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ex of traditional ec in the way jobs are allocated
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India; remnants of the caste system; the belief in birth determining one's destiny
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mixed economy
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an economic system in which the basic questions of what, how, and for whom to produce are resolved by a mixture of market forces with governmental direction and/or custom and tradition
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the US is an example of...
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a market economy with a mixture of govt regulation and govt ownership
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China is an example of...
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a centrally directed ec with some private ownership and sales
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the Soviet Union and the countries of Eastern Europe are examples of...
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countries transitioning from centrally directed to market economies
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India is an example of...
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a mixture of market, command and tradition economies
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