Vocabulary
The three basic economic questions
What goods and services should be produced
How should these goods and services be produced
Who consumes these goods and services
a market is...
any arrangement that allows buyers and sellers to exchange things
the three basic economic questions are answered by who in a centrally planned economy...
the government
the difference between private and intellectual property
private- property owned by individuals or companies and not by the government or the people as a whole
intellectual- such as books, songs, or movies
a product market is
the income people receive in return for supplying factors of production-land, labor, or capital
factor market
the elements of a free market economy
households and firms
factor and product market
the difference between communism and socialism
socialism- a range of economic and political systems based on the belief that wealth should be evenly distributed throughout society
communism- the central government owns and controls all resources and means of production and makes all economic decisions
a mixed economy is
an economic system that has some market-based elements and some government involvement
an economic system is
the five economic goals of society
economic efficiency, freedom, security, equity, growth
markets self regulate through
self-interest, incentives, and competition
authoritarian governments...
limit individual freedoms and require strict obedience
an economic transition is...
period in which a nation moves from one economic system to another
communism is...
innovation is...
the process of bringing new methods, products, or ideas into use
advantages of the free market
efficient response to changing marketplace conditions
freedom of choice for consumers and producers
variety of goods and services
growth and innovation
China and the Soviet Union
example of a far-eastern free-market powerhouse
Hong Kong
a centrally planned economy is...
an economic system in which decisions on the three key economic questions are based on voluntary exchange markets
a traditional economy...
relies on habit, custom, or ritual to answer the three basic economic questions
consumers have the power to decide what gets produced
consumer sovereignty
what do communism and socialism have in common
even wealth distribution
centralized control of economic power
privatization is...
the selling of enterprises operated by the government to individuals, and then allowing them to compete in the marketplace