Economic Systems
The most common type of economic system, it blends decentralized free markets with impactful government intervention
Mixed Economy
This is the factor of production that YOU as an individual bring into the factors market
Labor
This is defined as quantity produced at a given price
Supply
This is the cost of the choice you gave up
Opportunity Cost
The additional benefit of consuming one additional unit of a product (Hint, can be good, bad, or have zero impact)
Marginal Benefit
A system we don't typically have experience with, roles in this system are typically passed down from generation to generation
What is a traditional system
This factor of production is provided by nature
Land
This is defined as the quantity consumed/purchased at a given price
What is demand
This shows how money and resources flow through an economy
Circular Flow Model
DOUBLE JEOPARDY: This theory uses logic and calculations to make decisions that will always be in the decision-maker's best interest
Rational Choice Theory
Market System
Capital
When demand and supply meet at a given price, that price is known as
Equilibrium (Price)
The process of getting items from the manufacturer to the consumer is called _______
Distribution
The additional cost of producing one additional unit of product.
Marginal Cost
This system has ultimate governmental authority, where the a powerful central government answers our 3 central economic questions.
Command System
This is the factor of production that ties everything together into the creation of a product
Entrepreneurship
Demand
Needs and Wants being unlimited, while resources are limited, is a central economic question known as
Scarcity
Public Goods and Services are typically provided by ______
The government
They are ultimately responsible for answering our 3 essential economic questions in a market/mixed system
Individuals/Consumers
Explain how your factor of production (labor) moves through a circular flow model, and how it relates to the flow of money
You trade your labor for a job, where you earn income (you provide labor to the factors market, businesses pay you for your labor). You then use that income to pay bills and buy products (businesses provide products to the product market, you pay businesses for their products)
When an item becomes more expensive to produce, this could lead to a decrease in __________
Supply
A group of buyers and sellers of a good or service and the institution/arrangement by which they come together to trade is the definition of a _______
Market
What are 3 of the economic characteristics of a Market System
Economic Freedom
Consumer Sovereignty
Profit
Private Property
Voluntary Exchange
Limited Government Involvement