Ch. 5 Market economy Flashcards
Signs that are used by consumers and producers to determine how much of a good to buy or sell at a given price and time
Market signals
Goods that have a life expectancy of less than three years
Non durable goods
Goods which are expected to last for at least three years
Durable goods
Type of economic system which gives people only limited choices regarding what to produce and consume, is characteristic of societies with very simple economies
Traditional economic system
Economic system ruled by some type of centralized government that has the power to compel people to obey its economic decrees
Command economy
Illegal systems for exchanging goods to avoid governmental regulations
Black markets
Part of an economy that is controlled by private individuals, businesses and organizations
Private sector
That part of an economy, which is controlled by national state and local governments
Public sector
The diminishing of the value of goods that is caused by wear and time
Depreciation
The excess of the total revenue paid by buyers for goods over the sellers, total expense of producing those goods
Profit
The value of the best alternative that is foregone when a different alternative is taken
Opportunity cost
The total value of a business minus any liabilities
Equity
