Markets Flashcards
free market
government doesn’t interfere, individuals own the FoP, market makes decisions about allocation of resources (CAPITALISM AMERICA)
mixed economy
market allocates goods and services but government intervenes to provide products not provided by private sector (AUSTRALIA)
centrally planned/ commanded
government makes all decisions about allocation of resources, ideology is communism and socialism. (England)
social cost
cost incurred by society from the consumption (or production) of a good. (e.g. smoking)
social benefit
benefits obtained by society for the consumption (or production) of a good. (e.g. planting trees)
householders / consumers make choices because…
resources are scarce (economic problem)
firms/producers (businesses) sell…
goods and services to make a profit
organised markets
commodities e.g. rubber, oil, sugar, wheat etc.
financial markets
stocks, shares, currencies
products markets
supply and demand of goods and services in general e.g. clothes, food, cars
market mechanism
a system for allocating goods, services and resources that relies on producers and consumers to make exchanges using price ($)
