Economic Systems
Define capitalism.
What is an economic system in which production of goods and services are privately owned and operated for a profit.
Define opportunity cost.
What is the money or benefit lost in a decision making process when one option is chosen over the other.
When did hunting and gathering occur?
4,000,000 years ago - 8,000 B.C.
Define open opportunity.
What is everyone should have the chance to enter and compete in a marketplace, which this ability serves as an incentive for people to be productive.
Define private property.
What is buyers and sellers are free to own and use private property.
Differentiate communism and socialism.
What is communism is when property and resources are all collectively owned and controlled by the state, while socialism is when all citizens share resources.
Define tradeoff.
What is giving up one thing in exchange for something else.
When did the neolithic revolution take place?
8,000 B.C. - 10,000 B.C.E.
Define legal equality.
What is everyone should have the same economic rights under the law, so others should not have an advantage over others to succeed.
Define government involvement
What is buyers and sellers are free to operate with very little government involvement or intervention.
Define command economy.
What is a command economy is when a centralized government has control over the means of production and decides the output levels.
Define entrepreneurship.
What is starting, defining, and managing a business from scratch.
When did pre-industrial civilizations and cities form?
6,000 B.C. - 1750
Define free contact.
What is everyone should have the right to decide for themselves which legal economic agreements they want.
Define voluntary exchange.
What is when a buyer and seller agree to a mutual understanding of business together and each believes that the benefits outweigh the costs.
Define market economy.
What is a market economy is when production and prices of goods are determined by competition between privately owned businesses.
Define scarcity.
What is when the demand of a good or service is greater than the availability of that good or service.
When did industrialized civilizations and nation states form?
1750 - 1970
Define profit motive.
What is the force that moves people or organizations to improve and better their material well being.
Define consumer sovereignty.
What is buyers are allowed to exercise their dominance over what is produced by freely deciding whether to not buy or buy.
Define mixed economy.
What is a mixed economy combines aspects of capitalism and socialism. A mixed economy accepts private property permits economic freedom regarding a person capital.
Differentiate the different types of capital (human, physical, financial).
What is human capital is the knowledge and skills someone possesses that is useful in society, physical capital is the ability to produce goods and services, and financial capital is the monetary values that are able to help a business do good.
When did developed, developing, post industrial nation states and modern globalization take place?
1970 - present day
Define circular flow model.
What is the interactions of all that occurs in a market economy, representing where households and businesses meet.
Define specialization.
What is buyers and sellers are able to concentrate their efforts in areas where they may have an advantage.