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ECONOMICS Mid-Term '15 > Chapter 2 > Flashcards

Flashcards in Chapter 2 Deck (19):
0

The income people receive for supplying factors of production

Factor Payments

1

Government programs that protect people experiencing unfavorable economic conditions

Safety Net

2

Level of economic prosperity

Standard of Living

3

Economic system that relies on habit, custom, or ritual to decide questions of productions and consumption of goods and services

Traditional Economy

4

Economic system in which decisions on production and consumption of goods and services are based on voluntary exchange in markets

Market Economy

5

Economic system in which the central government makes all decisions on the production and consumption of goods and services

Centrally Planned Economy

6

An arrangement that allows buyers and sellers to exchange things

Market

7

The concentration of the productive efforts of individuals and firms on a limited number of activities

Specialization

8

A person or a group of people living in the same residence

Household

9

An organization that uses resources to produce a product, which it then sells

Firm

10

The financial gain made in a transaction

Profit

11

One's own personal gain

Self-Interest

12

An expectation that encourages people to behave in a certain way

Incentive

13

The power of consumers to decide what gets produced

Consumer Sovereignty

14

A social and political philosophy based on the belief that democratic means should be used to evenly distribute wealth throughout a society

Socialism

15

A political system characterized by a centrally planned economy with all economic and political power resting in the hands of the central government

Communism

16

Large farm leased from the state to groups of peasant farmers

Collective

17

An economic system characterized by private or corporate ownership of capital goods

Free Enterprise

18

To sell to individuals state-run firms, which are then allowed to compete with one another in the marketplace

Privatize