Econ Chapter 2-3 Economic Systems

patriotism

loves of one’s country

standard of living

level of economic prosperity

traditional economy

economic system that relies of habit, custom, ritual and tradition to decide 3 economic questions (what, how, and for whom.)

market economy

an economic system where decisions are made by the supply and demand of goods and services in a competitive marketplace.

command economy

Centrally planned economy, system in where government makes ALL economic decisions (answering 3 economic questions: what, how, and for whom.)

mixed economy

an economic system that blends elements of both market and command economies, government is involved to some extent

specialization

concentration of productive efforts of individuals and businesses on a limited number of activities

household firm

person or group of people living in single residence

profit

amount of money a business receives after expenses are subtracted from revenue.

incentive

the hope of reward or fear of penalty that influences behavior.

competition

the struggle amongst producers for the dollars of consumers

consumer

an individual or group that purchases goods and services for personal use.

laissez faire

doctrine that government generally should not intervene in the marketplace, allowing individuals and businesses to operate freely. (HANDS OFF)

private property

property that is owned by individuals or corporations rather than by the state or government.

interest groups

private organization that tries to persuade public officials (government) to act in ways that benefit its members

public interest

the concerns of society as a whole, rather than individuals or specific groups. It embodies the welfare and well-being of the general population.

macroeconomics

study of economic behavior and decisions in a nations whole economy (BIG MAC)

microeconomics

study of economic behavior and decisions of individual households and firms in a smaller scale economy. (microscope)

GDP

Gross Domestic Product, a dollar value of all final goods and services produced in a country during a specific time period.

business cycle

a period of macroeconomic expansion or growth followed by one of contraction or decline

work ethic

a commitment to the value of hard work

technology

the application of scientific knowledge for practical purposes, particularly in industry. It encompasses tools, machines, and techniques that enhance productivity.

public good

shared good or service for which it would be inefficient or impractical to make consumers pay individually and to exclude those who did not pay

welfare

government aid to the poor to ensure basic needs are met.