Core Concepts
These are the structures of methods and principles that a society uses to produce and distribute goods and services.
economic systems
In this economy, individuals and firms usually answer the three basic economic questions.
market economy
In economics, this is a group of buyers and sellers of a good or service who come together to trade.
market
These are the "two factors" that interact in a two-factor circular flow model.
households and businesses
These are considered normal and expected about how people do things in a specific country.
customs
This is the process of creating goods and services.
production
In this economy, community customs usually answer the three basic economic questions.
traditional economy
DOUBLE POINTS!!!
This is how governments get money to pay for public goods and services
tax revenue
These are the "three factors" that interact in a three-factor circular flow model.
households, businesses, and government
These are the beliefs, customs, and traditions of a particular nation, people, or social group.
culture
This is how products get from where they are manufactured to where they are purchased.
distribution
In this economy, the central government usually answers the three basic economic questions.
command economy
This is the process of starting, organizing, managing, and assuming responsibility for a business.
entrepreneurship
Name ONE of the markets that operate in a two-factor circular flow model
market for goods and services
market for factors of production
Identify one way in which culture can affect economics
(answers will vary)
These are things provided by the government for the use of all people.
public goods and services
In this economy, individuals make decisions with some government involvement.
mixed economy
These are the three basic questions of economic production
What goods and services should be produced?
How should the goods and services be produced?
For whom should the goods and services be produced?
These are the two types of directional flow in a circular flow model
flow of goods and services
flow of dollars
Most developed economies in the world are this kind of economic system
A model that shows the flow of goods and services and the interaction among households, businesses, banks, and governments.
circular flow model
DOUBLE POINTS!!!
Name FOUR of the SEVEN characteristics of a market system
economic freedom, competition, profit, private property, consumer sovereignty, voluntary exchange, limited government regulation
These people and groups form the basis of markets. List FOUR of the SIX.
producers, consumers, suppliers, buyers, sellers, gov't bodies
Identify THREE factors that can impact a circular flow model
Examples:
Taxes reduce money in households or businesses
Weather and natural disasters can impede distribution of goods and services
Recessions or booms can alter consumer spending
Government regulations can alter how producers and consumers are allowed to interact
This government requirement, often involving exams, training hours, or fees, restricts entry into certain professions like law, medicine, or cosmetology, and is justified as protecting consumers but also criticized for limiting competition.