Economic system Flashcards
What is economics?
The study of now individual and groups new limited resources to fulfill unlimited wants and needs.
What are wants?
What people would like to have
What are needs?
They are essentials of survival.
What are goods?
Products that people consume or use.
What is service?
A human actitvity.
What is scarcity?
The limited supply of something.
What is something that no country has?
Enough resources to produce everything that people need/want?
When developing an economic plan, each country must three economic questions, what are they?
1) What goods/services will be produced
2) How will goods/services be produced
3) Who will be consume the goods/services./
All economic systems are mixtures of these three, what are they?
Traditional, command, and market.
What are ALL economic choices based on?
Customs, traditions, beliefs on the past.
What does barring mean?
Trading without money.
What are the MAIN activities of traditional economy?
Farming, hunting, gathering.
What will people do?
People will make what they always made and do the same thing as there parents did.
What would the exchange of goods be done by?
Barting.
Give an example of places that do barting.
Villages in Africa and South America, the inuit in Canada, Aborigines in Australia.
What will be produced?
People follow tradition and make wait their ancestors made.
How will it be produced?
People produced goods the same way their ancestors did.
Who will consume them?
People in the village who need them.
True or false, the wants or the essentials people need.
False, its what the people want.
True or false, scarcity is the limited supply of something.
True
True or false, all the economic choices are base on customs and answers for the law.
False, it is based on customs, traditions, beliefs on the past.
True or false, barring means trading without money.
True
What are all economic decisions that are made by the government?
1) sets the prices of goods and services.
2) determines the wages of workers
3) plans what will be made
What is communism?
To ensure that all residents have their needs met and benefit equally from the production of goods and services.
What are goals of a command economy?
1) communism
2) to ensure that all wealth stays in the hands of an elite few.
3) to grow a strong military.
What are some potential advantages of a command economy?
1) government ensures that citizens’ needs are met through jobs, services (healthcare and education) and goods (food and clothes)
2) they government can quickly refocus production if needed.
What are some potential disadvantages of a command economy?
1) it’s often difficult for the government to distribute resources fairly.
2) there’s little reason for businesses to do a better job
3) limit personal freedom because they restrict choices available.
What is another name for market economy?
Free enterprise system.
What is free enterprise?
Competition between companies, which shifts prices of goods/services.
What happens when the government has no control of the economy?
Private citizens answer all the economic questions.
How are economic decision made? Give an example
They are made based on changes in prices.
Ex: 1 car company starts to make SUVs, lots of people now want one, since so many people want one so many other car companies make them.
What are some advantages of market economy?
1) buyers and sellers have a lot of freedom in they buy or sell.
2) They encourage innovations and inventions.
What are some disadvantages of market economy?
1) some companies fail.
2) to make a profit, some people may use unfair practices.
3) often rewards individuals or companies that satisfy consumer demand rather than the common good.
What are unfair practices?
1) paying poor salaries
2) make unsafe products
3) fail to contain pollution
