Some Vocab Words
a society does not have enough resources to produce all the things that people would like to have in their life
Scarcity
These include all sorts of businesses from one individual, to small businesses, to large corporations that produce goods and services to sell
Producers
These are the people who are buying and obtaining the goods and services
Consumers
is an economic system where the means of production are owned and controlled by a central authority, usually the government
Command Economy
is when resources, goods and services, are used based on social behavior dictated by ritual, habit, or custom; usually involves bartering
Traditional Economy
an economic system that blends Market Economy and Command Economy into one system
Mixed Economy
a Scottish thinker that argued that if everyone acted in their own "rational self-interest" it would better society and the economy in general; considered by many to be the thought leader behind Market Economy (Capitalism)
Adam Smith
ability or capacity of a good or service to be useful and fulfill our needs and wants
Utility
(commonly called capitalism or free-market capitalism) is generally defined as an economic system where SUPPLY and DEMAND direct the production of goods and services; not controlled by the government; private property is key
Market Economy
The 4 Factors of Production
Land, Capital, Labor, and Entrepreneurs
The value of the next best option given up
Opportunity Cost
This common economic phrase is used to describe the fact that nothing a consumer can consume is actually free
"There is No Such Thing as A Free Lunch"
Author of the Communist Manifesto; voiced the idea of the Command Economy; sought for all private property to be taken by the government and redistributed to the people to supply their needs
Karl Marx
Written by Adam Smith in 1776, this book outlines the basic ideas of capitalism such as the "invisible hand" of the market, rational self-interest, and the free market
The Wealth of Nations
Idea that government should play as small a role as possible in economic affairs
Laissez-Faire