Lesson 3 Vocab Flashcards
Economic Equity
The fairness with which an economy distributes its resources and wealth.
Economic System
A society’s way of coordinating the production and consumption of goods and services.
Traditional Economy
An economic system in which decisions about production and consumption are based on custom and tradition.
Command Economy
An economic system in which decisions about production and consumption are made by a powerful ruler or government.
Market Economy
An economic system in which decisions about production and consumption are left up to individual producers and consumers.
Factor Payment
Income earned when an individual sells or rents a factor of production that he or she owns. (Ex. Wages in exchange for labor)
Mixed Economy
An economic system in which both the government and individuals play important roles in production and consumption.
Free Enterprise System
An economic system in which the means of production are mostly privately owned and operated for profit.
