Economic Systems

Economic Systems Study Guide: Flashcards

1. Economy

  • Economy: A system of producing, distributing, and consuming goods and services.

2. Household

  • Household: A basic residential unit in which economic processes are organized and carried out.

3. Household Characteristics

  • Small-scale cooperative work group: Household as a unit of cooperation.

  • Small-scale corporation: Household seeking to maintain the well-being of its members.

4. Reciprocity (Distribution)

  • General Reciprocity: One-way giving with no expectation of return.

  • Balanced Reciprocity: Two-way giving with an expectation of immediate or timely return.

  • Negative Reciprocity: Maximizing gain and minimizing loss.

5. Firms

  • Firms: Profit-oriented companies specializing in specific goods or services.

6. Redistribution

  • Redistribution: The movement of goods and services through a center (individual or agency).

7. Market Exchange

  • Market Exchange: Distribution through a market for goods, services, land, and labor.

  • Money: The medium of exchange.

  • Price: Determined by supply and demand.

8. Consumption

  • Consumption: Often individual and conspicuous, as a public display of wealth and status.

9. Social Inequality

  • Social Inequality: Results from some people accumulating more wealth (land, property, possessions, income).

  • Powerful Elite: Control the means of production.

  • Labor: Most people sell their labor for wages.

  • Exploitation: Those who control the means of production take a percentage of the value of labor.