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Economics
Economics Chapter Two
| Question | Answer |
|---|---|
| economic system | the structure of methods and principles that s a society uses to produce and distribute goods and services |
| factor payment | the income people receive in return for supplying factors of production:wage/rent of building |
| profit | the amount of money a business receives in excess of expenses |
| safety net | a set of government programs that protect people who face unfavorable economic conditions: medicaid,welfare,medicare |
| standard of living | level of economic prosperity |
| innovation | the process of bringing new methods,products, or ideas into use |
| traditional econonmy | an economic system that relies on habit,custom, or ritual to decide the three key economic questions |
| market | any arrangement that allows buyers and sellers to exchange things |
| specialization | each person would complete one step to create a product (assembly line and more product is made) |
| free market economy | an economic system in which decisions on the three key economic questions are based on voluntary exchange in markets: private people make decisions |
| household | a person of group of people living in a single residence |
| firm | an organization that uses resources to produce a product or service, which it then sells |
| factor market | the arena of exchange in which firms purchase the factors of production from households: anyway business is transated |
| product market | the arena of exchange in which households purchase goods and services from firms |
| self-interest | an individual's own personal gain |
| incentive | the hope of reward or fear of penalty that encourages a person to behave in a certain way |
| competition | the struggle among producers for the dollars of consumers |
| invisible hand | a term coined by Adam Smith to describe the self-regulating nature of the marketplace |
| centrally planned economy/command economy | an economic system in which the government makes all decisions on the three key economic questions |
| socialism | a range of economic and political systems based on the belief that wealth should be distributed evenly throughout a society |
| communism | a political system in which the government owns and controls all resources and means of production and makes all economic decisions |
| authoritarian | describes a form of government that limits individual freedoms and requires strict obedience from its citizens |
| laissez faire | the doctrine that government generally should not intervene in the marketplace |
| private property | property that is owned by individuals or companies, not by the government or the people as a whole |
| mixed economy | a market-based economic system in which the government is involved to some extent |
| economic trasition | a period if change in which a nation moves from one economic system to another |
| privatization | the process of selling businesses or services operated by the government to individual investors, and then allowing them to compete in the marketplace |
| free enterprise system | an economic system characterized by private or corporate ownership of capital goods |
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sabrina.kizy
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