Economic Systems
The 3 economic questions are answered by custom.
What is a traditional economy?
The desire of producers to sell and earn more.
What is the profit motive?
Where buyers and sellers come together to make exchanges
What is a market?
The goal of maximizing resources
What is efficiency?
A situation in which the free market creates inefficiencies
What is market failure?
The government answers the 3 economic questions.
What is a command economy?
Economic system based on the belief that wealth should be evenly distributed in society.
What is socialism?
The struggle among producers for the dollars of consumers
What is competition?
The goal or value of making one's own choices
What is freedom?
Bridges, roads, and public transit are examples of this
What is infrastructure?
The 3 economic questions are answered by the interactions of consumers and producers.
What is a market economy?
The right of this allows consumers and producers to decide what, when, and how they buy and sell.
What is voluntary exchange?
The author who coined the phrase "the invisible hand"?
Who was Adam Smith?
The goal of improving the standard of living or increasing prosperity for all.
What is economic growth?
An economic side effect of a good or service that affects someone other than the producer or consumer.
What is an externality?
Something that motivates or de-motivates people to behave in a certain way.
What is an incentive?
The doctrine that government should generally not intervene in the marketplace.
What is laissez faire?
The tendency of individuals and businesses to focus their efforts on a limited number of activities.
What is specialization?
The goal of avoiding uncertainty
What is security?
A public good is a shared good or service for which it would be inefficient to do these two things
What is make individual consumers pay and exclude non-payers?
The driving force in a market economy, this is the impulse that encourages people to fulfill their needs and wants.
What is self-interest?
The two Constitutional amendments that protect private property rights
What are the Fifth and the Fourteenth Amendments?
Another way of saying that the buyer is king.
What is consumer sovereignty?
The goal of fairness in society
What is equity?
Someone unwilling to pay for a good or service but who would benefit if it were provided as a public good.
What is a free rider?