Economic Systems
What is the definition of an economic system?
An organized way to provide for the wants and needs of a group of people
What is the definition of demand?
desire, ability and willingness to buy a product
What is the definition of supply?
the amount of a product that would be offered for sale at different prices.
What is a surplus?
The business made more than consumers want to purchase.
- market
- free market
- Free enterprise
-capitalist
What type of economic system is capitalism most closely related to?
Market economy
What is the Law of Demand?
When price goes up, demand goes down
AND
When price goes down, demand goes up
What is the Law of Supply?
The Law of Supply states that as the price of a good increases, the quantity supplied also increases, and vice versa.
What is a shortage?
The consumers want more than the business made.
What are the names of Ms. Bean's cats
Mama and candy
In which system does the government make all major economic decisions?
Command Economy
A shift to the right in the demand curve means what?
an INCREASE in demand
A shift to the left in the supply curve means what?
A shift to the left in the supply curve means a decrease in supply.
How do you calculate TOTAL REVENUE?
Number of products sold x price
What is a substitute?
something that can be used in place of something else. (ex: whole milk vs fat free milk)
What is a blending of qualities from two or more pure economic systems?
Mixed Economy
Why do businesses make demand curves and schedules?
To decide what price to charge and how much to produce to make the most profit
What is a variable cost AND give an example
Costs that change as production amount change
Ex: labor, electricity, cost of raw materials
At the equilibrium point _________ and _________ are the same.
Supply and demand
What are the four roles the government plays in the U.S. economy?
Protector, provider, regulator, and consumer
Which economic system is the most common in the world?
Mixed
What does it mean to have a change in consumer income?
The amount of money the consumer has to spend increases or decreases
Why do businesses care about break-even points?
They want to know when a business will become profitable.
What is the phrase economists use to describe the equilibrium price?
The price that clears the market
Which characteristic of the U.S. economy is protected by the 14th Amendment?
Private Property Rights