Vocab.
An economy in which production is based o customsand traditions and economic roles are typically passed down from one generation to the next.
Traditional Economy
Any structure that allows buyers and sellers to exchange types of goods, services and information.
What is a Market
The study of how we make decisions in a world in which resources are limited.
What is Economics
Something that motivates a person to do something.
Incentive
Rising prices in the economy
Inflation
An economy in which private enterprise exists in combination with a considerable amount of government regulation and promotion.
Mixed Economy
Refers to how industries are classified based on their degree of competition for services and goods.
Market Structures
Demand for a good is greater than the availability of the good or service.
Scarcity
Financial motivations for people to take certain actions.
Economic Incentives
Ex: Loans, Mortgage Rates
Interest Rate
The market price at which the supply of an item equals the quantity demanded; market clearing price.
Equilibrium Price
A few very large sellers dominate the industry
Sometimes they engage in price wars, which are damaging to the company, but great for customers!
Oligopoly
Quantity demanded is greater than the quantity supplied.
Shortage
Punish people or businesses financially for certain actions.
Negative Incentive
Alternating intervals of growth and decline, tracking the GDP.
Business Cycle
A statistic used to gauge future trends in a nation's economy.
Indicator
Use non-price competition
EX. advertising, promotions, etc.
Lots of buyers and sellers who are well informed, but products are slightly different.
Monopolistic Competition
Communism and Socialism fall under this category
Government makes all decisions
Command Economy
Tax breaks to encourage consumers to spend on certain items.
Tax Credits
The measure of the economy’s output
It is the dollar value of all of the goods and services produced in a country within a year.
GDP
The driving force that encourages individuals and organizations to improve their material well-being.
Profit Motive
Exists in theory
Products are similar/identical → producers sell the same products to prevent rising prices among businesses
Pure/Perfect Competition
Types of Economic Systems
Traditional
Command
Communism
Market
Mixed
Government incentives that provide money to businesses in order to help them grow and cut costs for the consumer.
Subsidies
Measures the rate of inflation
CPI