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Traditional Economy
An economy that has little change is based on traditions, where people follow the work of their parents.
Command Economy
An economy in which the government controls a country's economy.
Mixed Economy
An economy in which private enterprise exists in combination with government regulation and promotion.
Market Economy
an economy in which decisions regarding investment, production, and distribution are based on supply and demand, and consumers can buy whatever they want.
Capitalism
An economic system based on private property and free enterprise.
Socialism
A system in which society, usually in the form of the government, owns and controls the means of production.
Communism
An economic system where factors of production are collectively owned and directed by the state.
Economics
The study of how people seek to satisfy their needs and wants by making choices
Three economic questions
What to produce? How to produce? For whom to produce?
Economic Freedom
freedom from government intervention in the production and distribution of goods and services
Economic Efficiency
wise use of available resources so as to obtain the greatest benefits possible
Economic Equity
the fairness with which an economy distributes its resources and wealth
Economic Growth
the ability of the economy to increase the production of goods and services
Economic Security
the idea that the less fortunate members of society should get the economic support they need to live a decent life
Economic Stability
a condition in which the goods and services people count on are available when they want them
opportunity cost
the most desirable alternative given up as the result of a decision
Trade-off
an alternative that we sacrifice when we make a decision
Scarcity
A situation in which unlimited wants exceed the limited resources available to fulfill those wants - permanent
shortage
a situation in which a good or service is unavailable - temporary
capital good
A manufactured item used to produce other goods and services
consumer goods
goods produced for present consumption
human capital
the knowledge and skills a worker gains through education and experience
physical capital
all human-made goods that are used to produce other goods and services; tools and buildings
labor
the effort that people devote to a task for which they are paid
Note
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