Assessment 2 Flashcards
(23 cards)
An organizational structure for addressing what, how, and whom to produce
Economics system
indivudial/group of people living together and share income
Household
A business, organization that produces goods or services and sells them to others
Firm
Where goods and services are exchanged for money
Product Markets
Factors of production and resources are exchanged for money
Factor Market
Payments for the use of resources
Factor Payment
Payment for which the government gives money away and doesn’t want anything in return
Transfer pay
What is the governements role in the economy?
Establishing / enforcing rules to improve market performance such as providing property rights, public goods and services, and helping improve economic security, Equity and sustainability.
Most key economic decisions are made by owners and consumers in a
Market Economy
In a ____, central planners make the important decisions about what, how, and for whom to produce
Command Economy
The Prospect or reward of punishment that influences a decision or motivates greater effort.
Incentive
combines a market economy with significant government involvement and elements of tradition
Mixed Economy
What are the Three Fundamental Questions
What should be produced?
How should it be produced?
For whom should it be produced?
What are societies five economic goals?
Growth, Efficiency, Equity, Security, Freedom
What are the four types of economic systems?
Traditional economy, command economy, market economy, mixed economy
What are the two most common economic systems?
Free Market & Command/Centrally planned
What are the two types of Centrally planned economies?
Communism and Socialism
who decides what and how goods are produced?
Gov & Bureaucracy
Who controls the factors of production in a free market
Individuals
Individuals own and decide what happens in FOP
Free market economy
What is a centrally planned economy?
An economy where government owns and decides what happens to the FOP
Where do governments get money to provide public goods?
Borrowing money, collecting taxes
