Unit 1 Key Terms Flashcards
State of being equal in status, rights and opportunity
Equality
Power to act, speak and think as one wants without restraint
Freedom
Legal designation of the ownership of property by nongovernment legal entities
Private property
Fair behavior/treatment
Justice
Legal right and power to give orders and enforce rules
Authority
Institutions and officials organized to establish and carry out public policy
Government
The ability to cause others to behave as they might not otherwise choose to do
Power
The quality of being accepted as an authority often applied to laws or those in power
Legitimacy
Product or service available for all people to consume whether they pay or not
Public goods
Independent state, especially one in which people share common culture
Nation-state
Right to exercise supreme authority over geographic region, group of people or oneself
Sovereignty
Process and method of making decisions for groups, generally applied to governments although also seen in human interactions
Politics
Established organization, especially one providing public service and rules that guide it
Institutions
System of government in which citizens express supreme power, acting either directly or through elected officials
Democracy
System of government in which a single ruler expresses supreme power based on heredity or divine right
Monarchy
System of government in which a single person or group excercises extreme power by controlling military and police
Dictatorship
System that relies on mainly markets to determine what goods and services to produce and how to do so
Market economy
System in which decisions about what to produce and how are made on the basis of customs, beliefs and traditions
Traditional economy
Nation in which supreme power rests with the citizens and is exercised by their elected representatives
Republic
Legislative assembly in which elected representatives debate and vote on proposed laws
Parliament
System that relies mainly on the central government to determine what goods and services to produce and how to produce them
Command economy
Branch concerned with the production, consumption and transfer of wealth
Economics
Wealth, resources, production and consumption of goods and services of a nation/ management of resources
Economy
Objective and fact based economics, can be tested and approved/disproved
Positive economics
Subject and value based economics, opinion based so cannot be approved or disproved
Normative economics
State of being short in supply
Scarcity
Goods that are not necessary but we wish for and goods and services that are required
Wants and needs
Balance achieved between two desirable features, compromise
Tradeoff
A process by which business decisions are analyzed
Cost benefit analysis
Motives or what encourages one to do something
Incentive
Products, possessions or merchandise
Goods
Intangible of doing work or helping someone
Services
Resources used by company to produce goods and services
Factors of production
Aim to enthusiastically develop yourself or the world we live in
Entrepreneurship
Wealth in the form of money or other assets owned by person or organization
Capital
The effectiveness of productive effort, rate of output vs rate of input
Productivity
Loss of potential gain from other alternatives when one opportunity is chosen
Opportunity cost
Curve that shows combination of goods and services that can be produced while using available resources
Production possibilities frontier
Concept or idea of fairness in economics
Economic equity
System of production and exchange of goods and services and use of resources
Economic system
Wages paid for services of labor, interest is paid for services of capital, rent is paid for services provided by land and profit
Factor payment
Economic system combining private and public enterprise
Mixed economy
System where few restrictions are placed
Free enterprise system
Basis of global trade as few countries produce enough goods to be completely self sufficient
Specialization
Assignment of different parts of manufacturing process or task to different people to improve efficiency
Division of labor
Act of buyers and sellers freely and willingly engaging in marker transactions
Voluntary exchange
Exchange of goods and services without using money
Barter
Current medium of exchange, assets property and resources owned by someone/ wealth
Money
Consequence of specialization or division of labor economic participants are dependent on others for products they cannot get themselves
Economic interdependence
Ability of someone to carry out economic activity more efficiently than others
Absolute advantage
Ability of someone to carry out economic activity more efficiently than another activity
Comparative advantage
