Economic Systems
Tradition and custom govern decisions
Rural and underdeveloped countries
Hunting, gathering, farming
Traditional Economy
Things necessary for your every day life
Needs
Price goes down, supply goes down
Price goes up, supply goes up
Law of supply
Any activity that seeks profit by providing goods and/or service
Business
Raw materials found in nature
Natural Resources
Economic decisions made by the marketplace according to laws of supply and demand
Capitalism
Market Economy
Things you could live without, but desire
Wants
Price goes down, demand goes up
Price goes up, demand goes down
Law of Demand
A person who selects, purchases, uses, or disposes of goods and services
Consumer
Components necessary to produce a societies goods/services
Factors of production
System in which a central authority makes economic decisions
Communism, Socialism
Command economy
Widely shared by many people
Public wants
This one has a direct relationship with price
Businesses need to hire workers in order to produce products and/or services
Wage earner
Knowledge, efforts, skill people bring to their work
Also called labor
Human Resources
Combination of command and market economies
Mixed economy
What individuals desire
Private Wants
This one has an inverse relationship with price
Demand
Getting paid to work for a business is an example of a
Wage earner
Things used to produce goods/services like buildings, materials, and equipment
Capital Resources
What type of economy is the US?
Mixed Economy
Can be physically weighed and measured
Goods
Where buyers and sellers agree on a price
Equilibrium
If you went to the store and purchased any thing there, you would be a
Consumer
The initiative to improve goods and services or create new ones
Entrepreneurial Resources