Economic Systems Flashcards
Scarcity
The limited supply of something
What are the three basic economic questions?
1.What goods/services will be produced. 2. How will goods/services be produced. 3. Who will consume to goods/services.
Traditional Economy
All economic decisions are based on customs, traditions, beliefs of the past.
Bartering
Trading without using money.
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 & sellers interact in the marketplace.
Free Enterprise
Competition between companies (shifts prices of goods/services)
Most democratic countries have some characteristics of both systems, so we keep it simple and call it?
Mixed Economy
The Economic Continuum
Based on how free a person is with business.
Nation-state
Country (Ex. Japan, South Korea)
Communism
a society where everyone owns everything. The government distributes wealth.
Capitalism
Private citizens own all means of production. No government control.
Human Resources
You. Person and their skills.
Supply and Demand
The amounts of a product available and people’s willingness to purchase a product.
