Economic Systems
The most basic economy.
What is traditional?
Food.
What is a good?
Physical location upon which to operate business.
What is land?
These are the individuals or families that live together.
What are households?
What is scarcity?
Government makes all the decisions.
What is a centrally planned economy?
Haircut.
What is a service?
The work done by people to create goods or services.
What is labor?
An economic term for the producers.
What are firms?
Focusing on a few specific activities rather than a broad range.
What is specialization?
Individuals make decisions based on exchange or trade.
What is a market economy?
An economic concept characterized by private or corporate ownership of capital goods and services.
What is free enterprise?
People are objects necessary for producing goods or services.
What is capital?
They provide the factors of production.
Who are households?
When an individual, business, or society are not using all of their resources to their fullest potential.
What is underutilization?
An economy that includes some government control and some individual decision making.
What is a mixed economy?
A company may use this chart to examine the effects of a trade off.
What is a production possibilities graph?
The two types of capital.
What are physical and human?
They turn "inputs" into "outputs."
Who are firms?
The concept of society allocating resources such as to military spending or consumer goods.
What is "guns or butter?"
An ideology that uses democratic means to evenly distribute wealth throughout the population.
What is Socialism?
The three key economic questions.
What goods and services to produce? How to produce these goods and services? Who consumes these goods and services?
Income received for use of land, labor, or capital.
What are factor payments?
Sometimes act as a third party to households and firms.
What is government?
Making trade off decisions with specific units of measure in mind.
What is thinking at the margin?