Economics Chapter 3

Information

sometimes listed as a 5th factor of production

Traditional

the economy and its rules are based on custom, heredity, and caste

Command Economy

the centralized authority (government) operates and regulates the economy; also called planned or directed

Free Enterprise

the people of the nation are free to make their own economic decisions; also called capitalism

Mixed Economy

a combination of capitalism and heavier government regulation; America is an example

Full Employment

anyone who wants to work has a job (3-4% employed)

Conservatives

economic growth over equity

Liberal

equity overgrowth

Land

usually most expensive; price will vary depending on location (city, country, farmland, etc.)

Minerals

precious metals with intrinsic value; sone have technological or architectural value

Animals

meat and animal by-products also provide value for businesses

Renewable Energy Resources

biomass, hydro-power, geothermal, wind, the sun, coal, petroleum, natural gas, nuclear power

Nonrenewable Energy Resources

cannot be replaced or take a long time to be regenerated

Labor

any work that contributes to the production of goods and services

Cost of labor

most of the price we pay for good pays for the labor used to make it; labor is usually the most expensive factor

Free Labor

free people will work harder and more effectively than people who aren’t free

Productivity

measure of how efficiently resources are employed

Capital

tangible producer goods

Subsistence Economy

an economic system that provides barely enough to keep a society alive; in this system, capital goods are not used effectively

Private Capitalism

a system in which the majority of a nation’s capital is owned and controlled by private individuals and businesses; capital is used effectively in this

State capitalism

a system in which the government will control and operate much (if not all) of a nation’s capital; capital is not used effectively in this

Capitalist

someone who owns or uses capital goods to produce other goods

Entrepreneurship

the intelligent supervision of the other factors of production (A.K.A. Management)

Entrepreneur

someone who starts a business undertaking, risking his own time, money, etc.

E.I. du Pont

One of the 1st American businessmen to profit from selling gunpowder

Real Property

tangible items

Financial Property

money and investments

Intellectual Property

creative labor (music, patents, etc.)

Enterprise

the freedom to use your own finances

Competition

rivalry between similar businesses; results in lower prices for consumers

Limited Government

little to no government restriction on property, businesses, investment, etc.

Circular Flow Model

the flow of the economic choices that are made by private households and private businesses

Capitalism

What is free enterprise also called

America

What country is an example of a mixed economy

Economic stability

What is one of the is government’s main responsibility

Land

What is considered a raw material

Intrinsic

What value does Minerals have

labor

What is usually the most expensive factor

Prosperity

What does labor result in for a nation

Property

What right of an individual is the cornerstone of capitalism

Private households and private businesses

The flow of the economic choices are made by what 2 groups