Chapter 1 Flashcards
Mixed Market Economy
An economic system with elements of both a command economy and a market economy.
Competition act
Prohibits a variety of business practices that lessen competition.
Input market
Firms buy resources that they need in the production of goods and services.
Economic system
The way In which a nation allocates its resources among its citizens.
Perfect competition
A market or industry characterized by a very large number of small firms producing an identical product so that none of the firms has any ability to influence price.
Not-for-profit organization
An organization that provides goods and services to customers, but does not seek to make a profit while doing so.
Market
An exchange process between buyers and sellers of a particular good or service
Supply curve
Graph showing how many units of a product will be supplied at different prices.
Demand and supply schedule
Assessment of the relationship between different levels of supply and demand at different price levels.
Privatization
The transfer of activities from the government to the private sector.
Factors of production
The resources used to produce goods and services: labour, capital, entrepreneurs, and natural resources.
Private enterprise
An economic system characterized by private property rights, freedom of choice, profits, and competition.
Command economy
An economic system in which government controls all or most factors of production and makes all or most production decisions
Output market
Firms supply goods and services in response to demand on the part of consumers
Supply
The willingness and ability of producers to offer a good or service for sale.
Oligopoly
A market or industry characterized by a small number of very large firms that have the power to influence the price of their product and/or resources.
Monopolistic competition
A market or industry characterized by a large number of firms supplying products that are similar but distinctive enough from one another to give some ability to influence price.
Deregulation
A reduction in the number of laws affecting business activity.
Surplus
Situation in which quantity supplied exceeds quantity demanded.
Market price (equilibrium price)
Profit-maximizing price at which the quantity of goods demanded and the quantity of goods supplied are equal.
Trade association
An organization dedicated to promoting the interests and assisting the members of a particular industry
Demand curve
Graph showing how many units of a product will be demanded at different prices.
Market economy
An economic system in which individuals control all or most factors of production and make all or most production decisions.
Law of supply
The principal that producers will supply more of a product as price rises.
Capitalism
An economic system in which markets decide what, when, and for whom to produce.
Communism
A type of command economy in which the government owns and operates all industries.
Demand
The willingness and ability of buyers to purchase a product or service.
Law of demand
The principal that buyers will demand more of a product as price drops
Business
An organization that seeks to earn profits by providing goods and services.
Profit
Expenses - revenue
Lobbyist
A person hired by a company or an industry to represent its interests with government officials.
Monopoly
A market or industry with only one producer, who can set the price of its product and/or resources.
Socialism
The government owns and operates only select major industries.
Revenue taxes
Taxes that are levied by governments primary to provide revenue to fund various services and programs
Progressive revenue taxes
Taxes that are levied at a higher rate on higher-income taxpayers and at a lower rate on lower income tax payers.
Regressive revenue taxes
Taxes that are levied at the same rate regardless of a persons Income.
Restrictive taxes
Taxes that are levied to control the product in question.
Karl Marx
Communism
