Study Notes for Economics: Globalization and Economic Systems

Economics

The study of how people make their livings, earn and spend money, trade with one another, and invest in their future.

Scarcity

A condition that occurs when resources cannot meet all existing demands, driven by limitless human desires and finite resources.

Goods

Tangible items that fulfill human needs, such as food or clothing.

Services

Actions performed for others, such as healthcare or education.

Traditional Economy

An economic system where roles and decisions are defined by historical customs and traditions, often involving hereditary occupations.

Subsistence Agriculture

A form of farming where producers grow only enough food to provide for their own families.

Cottage Industries

Small-scale, home-based production of goods, typically using family resources.

Free Enterprise System

An economic model characterized by private ownership, competition, and prices determined by supply and demand with minimal government intervention.

Supply

The quantity of a good or service that producers are willing and able to sell at various prices.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices.

Communist Economy

A system where the government owns all businesses and controls all major economic planning and resources, aiming for a classless society.

Socialist Economy

An economy where the government operates essential industries and provides public services, while allowing private ownership of less critical businesses.

Mixed Economy

An economic system that blends elements of free enterprise, socialism, and/or traditional systems; most modern nations fall into this category.

Commercial Agriculture

Large-scale farming specifically intended for sale in markets rather than personal consumption.

Commercial Industries

Businesses involved in the mass-production of goods for broad distribution and various markets.

Profit Motive

The desire to earn a financial gain, which acts as a primary incentive for individuals and businesses in a free enterprise system.