Social Studies Test pt.2 Flashcards
name each economist we looked at in class and what they talked about
Adam Smith: created modern economics (capitalism)
Malthus and Marx: had poor reaction to smith’s ideas, Malthus was an economic thinker
define capitalism
a country’s trade and industry are controlled by private owners for profit
define communism
economical equality, a world without different social class groups
define socialism
a political and economic theory of social organization
the similarities of the three
public ownership, economic equality, social welfare
the differences of the three
private ownership, free market, market economy
first economic system
traditional, customs and traditions are more important that money, crop growing
second economic system
command, where the government controls all economic activity, north korea
third economic system
market, two forces direct production of goods and services, united states
fourth economic system
mixed, a combination of free market and government intervention, united states
explain the relationship between supply and demand
if the supply of goods or services outstrips demand, prices will fall
explain why supply and demand is important to the economy
together they determine the prices and quantities of most goods and services
first factor of production
land, a farmer using farm land to grow crops
second factor of production
labor, a factory worker assembling a car
third factor of production
capital, a factory machine used to produce goods
fourth factor of production
entrepreneurship, Elon Musk founding spacex
define market equilibrium
a state where the supply and demand for a product or service are equal
define scarcity
short in supply, shortage
define invisible hand
a market force that helps supply and demand
define elastic supply and demand
a change in price leads to a large change in quantity
define inelastic supply and demand
a change in price leads to a small change in quantity
