economic system Flashcards
economics
the study of production, distribution and consumption of goods and services
economic system
the way a society organizes the productions, distribution and consumption of goods and services
economy
the resources and process involved in the production, distribution and consumption of goods and services
planned economy
government makes all decision about how to solve scarcity
mixed economy
combines private ownership and government control
market economy
the choices of individuals solve scarcity
what is scarcity
the idea that land, labour and capital limit support of what people need and want
land
consists of all materials found in the natural environment needed to produce goods and services such as renewable resources like trees and raspberry and non-renewable resources like gold and oil
capital
consists of the money that people own or borrow, used to purchase equipment, tools and other resources to produce goods and services
labour
consists of the physical and mental efforts needed to produce goods and services
privately owned
the part of economy owned and controlled by businesses and individuals
publicly owned
the part of economy owned and controlled by government and paid for by taxes
public good
what is best for society as a whole
shift left
a left shift on the economic continuum means more government involvement in the economy (planned economy)
shift right
a right shift on the economic continuum means less government involvement (market economy)
