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A set of vocabulary flashcards covering key concepts in economic systems and principles.
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What is profit?
The incentive manufacturers have to sell their products.
What is competition?
The struggle among various producers for consumers' business.
What are the three core economic questions?
What to produce?, For whom to produce?, How to produce?
What characterizes a traditional economy?
Includes economic systems, market economy, factor payment, centrally planned economy, and safety nets.
What is a centrally planned economy?
An economy where the government makes all economic decisions.
What is a free market economy?
An economy where prices and production are determined by supply and demand with minimal government intervention.
What defines a mixed economy?
An economy where resources and businesses are controlled by both private and government sectors.
What is opportunity cost?
The most desirable alternative given up in any choice or decision.
What is economic security?
The goal met when the government provides programs to protect individuals facing unfavorable economic conditions.
What limits economic growth?
Laws such as those that prohibit children under 18 from working.
What does efficiency represent in economic terms?
The effective use of scarce resources to provide valued services.
What is economic equity?
Assuring that wealth is fairly distributed.
What results from specialization?
Increased productivity, lower costs, and greater efficiency.
What are Adam Smith's 'invisible hand' factors?
Self-interest and competition.
What is laissez faire?
An economic philosophy advocating minimal government intervention in the economy.
What characterizes the U.S. economy?
It is best described as a mixed and free market economy.
What is competition in economic terms?
The sale of state-run firms to privatized individuals who can compete in the marketplace.
What is an economic transition?
The period of change when an economy shifts from centrally-planned to market-based systems.
What is scarcity in economic terms?
The basic problem arising from limited resources and unlimited wants.
What constitutes public goods?
Goods or services that the market cannot provide but benefit all of society.
What is the private sector?
The part of the economy that includes transactions of private businesses.
What does 'marginal' mean in economics?
Refers to the additional change resulting from one extra unit of good.
What are sunk costs?
Costs that have already been paid and cannot be reclaimed.
What role do negative externalities play?
They refer to unintended consequences that affect others, such as environmental harm.
What is the purpose of a production possibilities curve?
To display the maximum possible output of two goods to show efficiency and scarcity.
What happens when there is too much regulation?
It can lead to characteristics of a centrally planned economy, including poverty and insufficient supply of goods.