Economic Systems

Economy

A system of producing, distributing, and consuming goods and services.

Household

A basic residential unit in which economic processes are organized and carried out.

Household Characteristics

1. Small-scale cooperative work group: Household as a unit of cooperation. 2. Small-scale corporation: Household seeking to maintain the well-being of its members.

General Reciprocity

One-way giving with no expectation of return.

Balanced Reciprocity

Two-way giving with an expectation of immediate or timely return.

Negative Reciprocity

Maximizing gain and minimizing loss.

Firms

Profit-oriented companies specializing in specific goods or services.

Redistribution

The movement of goods and services through a center (individual or agency).

Market Exchange

Distribution through a market for goods, services, land, and labor.

Money

The medium of exchange.

Price

Determined by supply and demand.

Consumption

Often individual and conspicuous, as a public display of wealth and status.

Social Inequality

Results from some people accumulating more wealth (land, property, possessions, income).

Powerful Elite

Control the means of production.

Labor

Most people sell their labor for wages.

Exploitation

Those who control the means of production take a percentage of the value of labor.