Chapter 3 Terms Flashcards
1
Q
What are the four factors of production?
A
- Natural Resources
- Labor
- Capital
- Entrepreneurship
2
Q
What is considered to be the fifth factor of production?
A
- Information
3
Q
Traditional Economy
A
- A system in which decisions involving the production, distribution, and consumption of goods are based upon custom, heredity, and caste
4
Q
Command Economy or Planned/Directed Economy
A
- A system in which a centralized authority determines the production and distribution of goods and services as well as things like savings, investments, and prices
5
Q
Free Enterprise Economy
A
- A system in which people are free to make their own economic choices
- AKA: private capitalism or market economy
6
Q
Mixed Economy
A
- When a system combines a good measure of free enterprise in some areas with heavy state regulation in others
7
Q
Natural Resources
A
- Includes land and other raw materials
8
Q
Labor
A
- Any work, whether physical or mental, that contributes to the production of goods and services
9
Q
Subsistence Economy
A
- An economic system that provides barely enough to keep a society alive
10
Q
Private Capitalism
A
- The system in which the majority of a nation’s capital is owned and controlled by private individuals and businesses
11
Q
State Capitalism
A
- A system in which the owner of much of the nation’s capital is a powerful, centralized apparatus called the collectivist state
12
Q
Capitalist
A
- Anyone who owns or producer goods or owns a share of some business that produces goods
13
Q
Entrepreneurship or Management
A
- The intelligent direction and supervision of natural and human economic resources
14
Q
Entrepreneur
A
- A person who undertakes management of economic enterprises on a bold scale, with some danger of losing his investment of money and time
15
Q
E. I. du Pont
A
- One of America’s early “captains of industry”
16
Q
What are the basic components of capitalism?
A
- Property rights
- Freedom of enterprise
- Competition in a market environment
- Limited government
17
Q
Circular Flow Model
A
- Illustrates how resources and products move through the market
18
Q
What two entities make up the majority of economic decisions in the free market?
A
- Private Households
- Private Businesses
19
Q
Real Property
A
- Land, buildings, and other tangible things
20
Q
Financial Property
A
- Cash, savings, and other investments
21
Q
Intellectual Property
A
- The result of creative labor
- May include the right to a song, movie, etc.
22
Q
Resource Market
A
- Where a business can go to purchase the resources necessary to produce goods and services
23
Q
Product Market
A
- Where finished goods and services are sold to consumers
24
Q
Financial Market
A
- Where financial assets are traded
