Studied by 0 people
Looks like no one added any tags here yet for you.
Property Rights
The idea that things can be owned: Exclusive, Enforceable, Transferable
Command Economy
Incentive problems
Markets
Markets form when multiple parties exchange things of value
Households
the owners of resources- supplies to firms in the resource market and the buyers of goods and services- demanded from firms in the product market
firms
Business entities that demand land, labor, and capital from households in the resource market and produce goods and services, which they supply to households in the product market
Resource market
where households supply land, labor capital, and entrepreneurship/technology to firms in exchange for money
Product market
where firms supply goods and services to households in exchange for money
Economic system
A system of allocating the means of production and the goods and services produced in an economy
Wages
the payment firms make to households in exchange for their labor
Rent
the payment firms make to households in exchange for capital
interest
the payment firms make to households in exchange for capital
profit
the payment to entrepreneurs who start or own business
Market economy
in its purest form, a market economy answers the three economic questions by allocating resources and goods through markets, where prices are generated.
Command economy
in its purest form, a command economy answers the three economic questions by making allocation decisions centrally
Note
Flashcard