Unit 1: Economic Systems Vocabulary

The way a society organizes the production, distribution, and consumption of goods and services is called an ECONOMY

The way a society organizes the production, distribution, and consumption of goods and services is called…

The set of rules and institutions a society uses to decide what to produce how to produce it, and who receives and who receives the goods and services is an ECONOMIC SYSTEM

The set of rules and institutions a society uses to decide what to produce how to produce it, and who receives and who receives the goods and services is…

The basic economic problem that exists because resources are limited but human wants are unlimited is called SCARCITY

The basic economic problem that exists because resources are limited but human wants are unlimited is called…

The value of the next best alternative that is given up when making a decision is known as OPPORTUNITY COST

The value of the next best alternative that is given up when making a decision is known as…

A general increase in prices over time that reduces the purchasing power of money is called INFLATION

A general increase in prices over time that reduces the purchasing power of money is called…

An economic system based on customs, traditions, and beliefs passed down through generations is a TRADITIONAL ECONOMY

An economic system based on customs, traditions, and beliefs passed down through generations is…

An economic system in which individuals and businesses make decisions based on supply and demand with little government involvement is COMMAND ECONOMY

An economic system in which individuals and businesses make decisions based on supply and demand with little government involvement is…

An economic system in which the government makes most economic decisions is a MARKET ECONOMY

An economic system in which the government makes most economic decisions is…

An economic system that combines elements of both market and command systems is a MIXED ECONOMY

An economic system that combines elements of both market and command systems is…

An economic system in which the government owns or controls major industries to promote economic equality is called SOCIALISM

An economic system in which the government owns or controls major industries to promote economic equality is called…

An economic system in which all property is owned collectively and the government controls production and distribution is called COMMUNISM

An economic system in which all property is owned collectively and the government controls production and distribution is called…

Any place or system where buyers and sellers exchange goods or services is called a MARKET

Any place or system where buyers and sellers exchange goods or services is called…

The amount of good or service producers are willing and able to sell at different prices is known as SUPPLY

The amount of good or service producers are willing and able to sell at different prices is known as…

The amount of good or service customers are willing and able to buy at different prices is known as DEMAND

The amount of good or service customers are willing and able to buy at different prices is known as…

A trade in which both the buyer and seller believe they will benefit is called VOLUNTARY EXCHANGE

A trade in which both the buyer and seller believe they will benefit is called…

A trade in which both the buyer and seller believe they will benefit is called PROFIT

The money a business earns after subtracting costs from revenue is called…

The rivalry among businesses to attract customers is known as COMPETITION

The rivalry among businesses to attract customers is known as…

The idea that consumers influence what is produced through their buying choices is called CONSUMER SOVEREIGNTY

The idea that consumers influence what is produced through their buying choices is called…

When individuals or businesses focus on producing a limited range of goods or services to increase efficiency this is called SPECIALIZATION

When individuals or businesses focus on producing a limited range of goods or services to increase efficiency this is called…

The right to own, use, and sell property and resources is known as PRIVATE PROPERTY RIGHTS

The right to own, use, and sell property and resources is known as…

An economic philosophy that supports minimal government involvement in the economy is called LAISSEZ FAIRE

An economic philosophy that supports minimal government involvement in the economy is called…

When the government takes ownership or control of a private business or industry, it is said to NATIONALIZE that industry

When the government takes ownership or control of a private business or industry, it is said to…

When the government transfers ownership of a business or service to private individuals or companies, it is said to PRIVATIZE it

When the government transfers ownership of a business or service to private individuals or companies, it is said to…

A model that shows how money, goods, and services move between households, businesses and government is the CIRCULAR FLOW MODEL

A model that shows how money, goods, and services move between households, businesses and government is the…

The market where goods and services are bought and sold is called the PRODUCT MARKET

The market where goods and services are bought and sold is called the…

The market where labor, land, and capital are brought and sold is called the FACTOR MARKET

The market where labor, land, and capital are brought and sold is called the…

The worldwide system of trade and economic relationship among countries is known as the GLOBAL ECONOMY

The worldwide system of trade and economic relationship among countries is known as the…