Unit 5 Flashcards
Market Economy
Economic decisions made by individuals
Free Market
The right to buy and sell goods
Profit
The money that is left over after expenses are paid
Scarcity
The lack of a particular resource
Law of Supply
Businesses will produce more products when they can sell them at higher prices
Law of Demand
The greater the demand the higher the price
Free Enterprise
Business owners will operate how they want without the government interfering
Capitalism
The economic system where the productive resources are owned by private citizens
Monopoly
The only one selling or providing a service
Business Cycle
Economic patterns that goes through ups and downs
Expansion
Period of economic growth
Recession
Mild economic slowdown
Depression
Severe economic decline
Absolute Advantage
When a country can produce more of a given product than others can
Comparative Advantage
When a country can provide a product more efficiently that the others
