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Economy
A system for coordinating a society’s productive and consumptive activities
Economic Structure
The structure of methods and principles a society uses to produce and distribute goods and services.
Factor Payment
The income received for supplying factors of production like labor, capital, land, and entrepreneurship.
Profit
An amount of money that you gain when you are paid more for something than it cost you to make, get, or do it.
Safety Net
Policies and programs that help individuals and families manage risk
Standard of Living
The material well being of the average person in a given population.
Innovation
The development of ideas
Traditional Economy
Those in which customs and traditions are more important than money
Market
Any place where two or more parties can meet to engage in an economic transaction
Specialization
The process wherein a company or individual decides to focus their labor on a specific type of production
Free Market Economy
The laws of supply and demand provide the sole basis for the economic system, without government intervention
Incentive
Benefits or costs of an action that influence people's decisions and behavior
Competition
Various sellers each try to offer better products, lower prices, and other advantages to choosing their wares over a rival's.
Adam Smith/Invisible Hand
Metaphor that describes the unseen forces of self-interest that impact the free market.
Consumer sovereignty
The idea that consumers hold the power to influence production decisions, based on what goods and services they purchase
Command Economies
A centralized government controls the means of production and determines output levels.
Socialism
An economic system in which major industries are owned by workers rather than by private businesses.
Communism
A political and economic system that seeks to create a classless society in which the major means of production, such as mines and factories, are owned and controlled by the public.
Economic Transition
Countries which are undertaking macroeconomic reforms in an attempt to alter the ways in which their economies are managed.
Privatization
A government-owned business, operation, or property becomes owned by a private, nongovernment party.
Nationalization
The process of taking privately-controlled companies, industries, or assets and putting them under the control of the government
Mixed Economies
An economy organized with some free-market elements and some socialistic elements
Private Property
The ownership of property by private parties
Intellectual Property
Any intellectual creation, such as literary works, artistic works, inventions, designs, symbols, names, images, computer code, etc
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