Chapter 2: Economic Systems Flashcards

(47 cards)

1
Q

the method used by a society to produce and distribute goods and services

A

economic system

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2
Q

the income people receive for supplying factors of production, such as land, labor, or capital

A

factor payments

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3
Q

the love of one’s country; the passion that inspires a person to serve his or her country

A

patriotism

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4
Q

government programs that protect people experiencing unfavorable economic conditions

A

safety net

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5
Q

level of economic prosperity

A

standard of living

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6
Q

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

A

traditional economy

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7
Q

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

A

market economy

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8
Q

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

A

centrally planned economy

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9
Q

economic system in which a central authority is in command of the economy; a centrally planned economy

A

command economy

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10
Q

market-based economic system with limited government involvement

A

mixed economy

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11
Q

ann arrangement that allows buyers and sellers to exchange things

A

market

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12
Q

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

A

specialization

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13
Q

a person or group of people living in the same residence

A

household

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14
Q

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

A

firm

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15
Q

market in which firms purchase the factors of production from households

A

factor market

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16
Q

the financial gain made in a transaction

A

profit

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17
Q

the market in which households purchase the goods and services that firms produce

A

product market

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18
Q

one’s own personal gain

A

self-interest

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19
Q

an expectation that encourages people to behave in a certain way

20
Q

the struggle among produces for the dollars of customers

21
Q

term economists use to describe the self-regulating nature of the marketplace

A

invisible hand

22
Q

the power of consumers to decide what gets produces

A

consumer sovereignty

23
Q

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

24
Q

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

25
requiring strict obedience to an authority, such as a dictator
authoritarian
26
large farm leased from the state to groups of peasant farmers
collective
27
industry that requires a large capital investment and that produces items used in other industries
heavy industry
28
the doctrine that states that government generally should not intervene in the marketplace
laissez faire
29
property owned by individuals or companies, not by the government or the people as a whole
private property
30
an economic system characterized by private or corporate ownership of capital goods; investments that are determined by private decision rather than by state control; and determined in a free market
free enterprise
31
a range with no clear divisions
continuum
32
period of change in which an economy moves away from a centrally planned economy toward a market-based system
transition
33
to sell state-run firms to individuals
privatize
34
What are the 3 key economic questions?
1. What goods and services should be produced? 2. How should these goods and services be produced? 3. Who consumes these goods and services?
35
Give an example of a safety net in our economic system or an example of what can be covered by a safety net
food stamps, injury, national disasters, unemployment
36
making the most of resources
economic efficiency
37
freedom from government intervention in the production and distribution of goods and services
economic freedom
38
the comfort in knowing we can get what we need and want
economic security and predictability
39
fair distribution and wealt
economic equality
40
What can lead to a higher standard of living?
economic growth and innovation
41
What is an example of a traditional economy?
the Amish
42
What is an example of a command or centrally planned economy?
The Soviet Union
43
What kind of economy do we have in the United States?
a mixed economy
44
Why are economies and markets necessary?
because we are not self-sufficient; we cannot make the things we need or want on our own
45
What are the two types of incentives?
monetary and nonmonetary
46
Who owns all the land and capital in a centrally planned economy?
the government
47
What is the less extreme form of communism?
socialism