economic systems Flashcards
scarcity meaning
the limited supply of something
three basic economic questions
what goods/services will be produced?
how will goods/services be produced?
who will consume the goods/services?
traditional economy meaning
all economic decisions are based on customs, tradition, and beliefs of the past
bartering meaning
trading without using money
command economy meaning
all economic decisions are made by the government
market economy meaning
economic decisions are made based on the changes in prices that occur as buyers and sellers interact in the market place
free enterprise meaning
competition between companies (shifts prices of goods/services)
most democratic countries have some characteristics of both systems, so we keep it simple and call them:
mixed economics
the economic continuum meaning
how economically free a country is on a scale of 0-10%
nation-state meaning
country
communism meaning
no private ownership, everyone equally owns everything and works together
capitalism meaning
private ownership of everything, runs off of the ideas or free competition
supply and demand meaning
amount of a product and people’s willingness to buy it
human resource meaning
workers and their skills
