Economics Test (copy)

Communism

economic and political system in which factors of production are owned and directed by the state

market

mechanism through which buyers and sellers of an economic product or service come together

mixed economy

System that has some combination of traditional, command, and market economics

Capital-intensive

requiring large amounts of investment in equipment in relation to labor

Socialism

system in which government owns and controls some factors of production

minimum wage

lowest legal wage that can be paid to most workers

inflation

rise in the general level of prices

Social Security

federal program retirement benefit that covers most working people

Consumer sovereignty

the role of the consumer as ruler of the market

Competition

Struggle among sellers to attract consumers

entrepreneur

someone who organizes and manages land, capital, and labor to make a profit

Voluntary exchange

economic action done or brought about by free choice

profit motive

driving force that encourages people to improve their material well-being

modified free enterprise economy

market economy in which people freely carry on economic affairs but are subject to some government regulation

economic system

efficient way of allocating resources and producing and distributing goods and services in a society

market economy

system in which economic activity is driven by supply, demand, and the price system

traditional economy

system in which economic activity is the result of ritual, habit, or custom

capitalism

economic system in which private citizens own and use resources to make a profit

command economy

privatization

mechanism through which buyers and sellers of an economic product or service come together

Economics

the study of of how people try to satisfy seemingly unlimited and competing needs and wants through the careful use of relatively scarce resources

Paradox of value

The idea that something not vital to survival like diamonds, would have a higher value than something that is like water

Gross Domestic Product

The monetary value of all final goods, services, and structures produced within a country’s border’s in a 12-month period

Utility

the capacity to be useful and provide satisfaction

Laissez faire

A French term for “let it be” and means the government should not intervene in the economy

Adam Smith

the Scottish economics who theorized that people act in their own best interests

Population density

The number of people per square mile of land area

Karl Marx

German philosopher founded socialism in 1848

Nationalization

conversion of private property to government ownership

collectivization

the forced common ownership of all agricultural and industrial enterprise

Privatization

conversion of state-owned factories and other property to private ownership

Tangible

the accumulation of products that can be held

Gross Domestic Product

the dollar value of all final goods, services, and structures produced within a country’s border in a 12-month period

Great Recession

event from 2007-09 in which the United States economy actually contracted

Catalyst

they start the chain that helps both consumers and the government

fixed income

income that does not increase over time, even though prices do

Productivity

a measure of the amount of goods and services produced with a given amount of resources

the sum of people’s skills, abilities, health, knowledge, and motivation