Economic Systems Vocab

capitalism (free market economy)

An economic system based on private property, competition, and free enterprise, with limited regulation by the government.

entrepreneur

A person who starts up and takes on the risk of a business

consumer

A person who purchases goods and services for personal use

producer

A person, company, or country that makes, grows, or supplies goods for sale

communism (command economy)

economic system in which all property, industries, and resources are owned by the state

globalization

when companies rely on workers, materials, or markets in other countries

competition

when producers offer lower prices, better quality, or innovations to try to attract more customers

innovation

a new product design or business model

monopoly

when a single company achieves control of an entire market, preventing competition and consumer choice

socialism (mixed economy)

economic system in which government owns certain industries and controls certain services (ex. electricity, health care), while the rest are owned and controlled by private businesses.

regulation

control that the government may have over how goods or services are produced and made available

supply and demand

the way that the price of a good rises and falls, depending on how many people want it (demand) and depending on how much of the good is available (supply)

tariff

a tax put on imported goods, to raise their price and protect domestic industries.