chapter 4 economics Flashcards
(50 cards)
societies differ in their approach to solving scarcity
economic system
Clayton
Economic Principles and Practices
Economic Principles and Practices, Clayton
an organized way by which a society provides for the needs and wants of the people
Vivar
Economics: Theories and principles
Economic: Theories and principles, Vivar
the sum total of institutions and models of customs , which have become permanent and became a part of economic activities of a country
Tullao
Understanding Economics in the Philippine Setting
3 prototypes of economic system:
traditional, command. market
the oldest type of economic system
traditional system
activities according to practices handed down from their ancestors
traditional system
reasons why they still do traditional:
value their customs and traditions, find these activities still relevant to granting their needs
bad about traditional
they are boring, not innovative
a society that operates like an army
command system
a powerful authority manages the economy from top to bottom
command system
downsides of command system
no freedom; choice, enterprise, private initiative
good side of command system
everyone is equal
not only a place for trading but also a mechanism through which economic activities are organized
market system
who started the market system
Adam smith in England
Adam Smith book
the wealth of Nations, 1776
the key to progress is allowing individuals to pursue their self interest and to satisfy themselves without the government interference as much as possible
market system
individuals are free to make economic decisions
market system
determines the price of the product
interaction
rapid increase in prices
inflation
decline in economic activity
recession
economic effect of the activity to a third party
externality
