Economic Systems Flashcards
Scarcity
The limited supply of something.
Basic economic questions
What goods/ services will be produced.
How will goods/services be produced.
Who will consume the goods/ services.
Traditional Economy
All economic decisions are based on custom, tradition, belief of the past.
Command Economy
All economic decisions are made by the government.
Market Economy
Economic decisions are made based on the changes in prices that occur as buyers and sellers interact in the marketplace
Free enterprise
Competition between companies ( shifts price of goods/services).
Mixed economic
Democratic countries have some characteristics of both systems
The economic continuum
How economically a country is on a scale.
Nation- state
Country
Communism
No private ownership. Everyone equally owns everything and work together.
Capitalism
Private ownership of everything. Runs of the idea of free competition.
Supply and demand
Amount of a product and people’s willingness to buy it.
Human Resource
Workers and their skills.
