Objective 4 Flashcards
Economic system
A system by a nation or society organizes its resources to produce and distribute goods and services to meet its needs.
Command system
An economic system characterized by centralized planning of production bureaucratic allocation of goods and services, and government ownership of the factors of production.
Market system
An economic system characterized by free enterprise, private ownership of the factors of production and where price provides the primary means of allocating scarce resources.
Private property
Ownership of resources and intellectual property that is protected by law.
Free enterprise
A system by which businesses are free to compete with little control of the government.
Competition
A market structure characterized by many suppliers in rivalry to meet the needs of buyers; provides a check to abuses arising from the concentration of market power.
Freedom of choice
A system by which there are sufficient suppliers so that buyers are free to select which to patronage and how to spend their income.
Self-interest
A condition in which both suppliers and buyers are motivated to seek a benefit for themselves; leads to complementary and voluntary trade that benefits both parties
Entrepreneurship
The development of sustainable businesses that meet the needs of customers; a primary driver of innovation and advancement in a market economy.
