American free market economy Flashcards
What is scarcity?
Scarcity is a lack of resources or goods.
What is opportunity cost?
Is what is given up when making a choice.
What are the four types of resources?
Natural resources
Human resources
Capital resources
Entrepreneurship resources
What is production and consumption?
Production is when resources are combined in the process of creating goods or services. Consumption is when consumers purchase and use a good or service.
What are the three economic questions that all countries must answer?
1.What will be produced?
2.How will it be produced?
3.For whom would it be produced?
What are the four types of economic systems?
Traditional economy, free market economy, mixed economy, command economy.
What is traditional economy?
Decisions based on tradition or family etc.
What is free market?
Little government involvement, private ownership, profit motive, competition, consumer sovereignty, individual choices.
What is command?
central organization, resources and property owned by government, lack of consumer choice.
What is mixed?
more government involvement, private and public sector.
What type of economy does the US have?
mixed economy
