Econ Vocab 2

Question 1

Economic System

Answer 1

the way a society uses it’s scarce resources to satisfy its people’s unlimited wants

Question 2

Traditional Economics

Answer 2

Centers on families, clans or tribes

Question 3

Command Economics

Answer 3

Government makes economic decisions

Question 4

Market Economics

Answer 4

Driven by choices of consumers and producers

Question 5

Centrally planned economy

Answer 5

A system in which the society’s leaders, usually members of the central government make all economic decisions.

Question 6

Socialism

Answer 6

An economic system in which the government owns some or all of the factors of production.

Question 7

Communism

Answer 7

more extreme form of socialism in which there is no private ownership of property and little or no political freedom.

Question 8

Authoritarian

Answer 8

system requires absolute obedience to authority

Question 9

Private-property rights

Answer 9

rights of individual and groups to own property

Question 10

Market

Answer 10

place or situation where people buy and sell goods services

Question 11

Laissez faire

Answer 11

Government should not interfere in economy

Question 12

Capitalism

Answer 12

system having private ownership of factors of production

Question 13

Voluntary exchange

Answer 13

traders believe they get more than they give up

Question 14

Profit

Answer 14

financial gain from business transaction

Question 15

Competition

Answer 15

Sellers’ efforts to get business by offering best deal

Question 16

Consumer Sovereignty

Answer 16

Buyers choose products, control what is produced

Question 17

Specialization

Answer 17

People concentrate their efforts in the activities they do best

Question 18

Circular flow model

Answer 18

Illustrates how interactions occur in a market

Question 19

Product market

Answer 19

Market where goods and services bought and sold

Question 20

Factor market

Answer 20

Market for the factors of production

Question 21

Mixed Economy

Answer 21

an economic system that that has elements of traditional, command, and market economies

Question 22

Nationalize

Answer 22

to change from private ownership to government or public ownership.

Question 23

Privatize

Answer 23

to change from government or public ownership to private ownership

Question 24

Global economy

Answer 24

all the economic interactions that cross international boundaries