basic concepts
the act of distributing resources for a specific purpose
allocate
In this type of economy, government officials make all key decisions about production and consumption.
command economy
This type of resource is derived from nature, such as land or minerals.
natural resource
The system where buyers and sellers freely exchange goods and services
market
The goal of an economy to provide goods and services efficiently
efficiency
This term describes the study of entire economies or large sectors.
macroeconomics
An economy where traditions, customs, and beliefs shape the goods and services the economy produces.
traditional economy
Goods used to produce other goods, like machinery or tools, fall under this category
capital goods
The right to own land, buildings, or objects and use them as one wishes
private property rights
An economic system in which the government owns most resources and controls production.
socialism
The process of trading goods or services directly without using money
barter
This term refers to a system that combines characteristics of both capitalism and socialism
mixed economy
An individual who combines resources to create goods and services, taking risks in the process.
entrepreneur
The competition-driven process where goods are traded in this type of market
product market
Ensuring that an economy remains steady, without rapid swings in output and employment.
stability
This concept represents the cost of forgoing the next best alternative when making a decision.
opportunity cost
The French term meaning "let do," advocating minimal government intervention in the economy.
laissez faire
This economic model illustrates the trade-offs and maximum output possibilities for two goods.
production possibilities curve(PPC)
The system in which countries or regions rely on each other for resources, goods, or services.
interdependence
An economic policy aimed at achieving a fair distribution of wealth
equity
This economic term measures the satisfaction or usefulness obtained from a good or service.
utility
When a government transfers ownership of a business from public to private hands
privatize
Dividing the production process into different tasks to improve efficiency.
division of labor
This term describes when people or regions concentrate on tasks they are good at
specialization
A market structure where many businesses vie for customers by offering better deals or products.
competition