free market economy
command system
economic system characterized by a central authority that makes the major economic decisions.
socialism
economic system in which government owns some factors of production and has a role in determining what and how goods are produced.
capitalism
economic system in which private citizens own and use the factors of production in order to generate profits.
market
meeting place (or arrangement) where buyers and sellers interact; this may be local, regional, national, or global.
economic systems
organized way a society provides for the wants and needs of its people.
Sustainability
The ability to keep in existence or maintain. A sustainable ecosystem is one that can be maintained
private property
fundamental feature of capitalism in that individuals own and control their possessions as they wish (houses, businesses, etc)
freedom
One of the 5 main goals= people (especially thinking buyers & sellers) can choose to do as they want
equity
One of the 5 main goals of American economy= fairness (different than 'equality' which not everyone has as a goal)
growth
One of the 5 main goals of the Amer. economy= making more stuff (goods & services, not resources) than previously
efficiency
One of the 5 main goals= (a) not wasting resources *AND* (b) making what we want with those resources.
stability
One of the 5 main goals= having a job/ able to pay bills, etc (at a personal level), or having low unemployment & low inflation (at a societal level)
the three questions for all society
WHAT/ HOW/ FOR WHOM to produce (goods & services)
voluntary exchange
act of buyers and sellers freely and willingly engaging in market transactions; a characteristic of capitalism and free enterprise.
free enterprise
an economic system in which privately owned businesses have the freedom to operate for a profit with limited government intervention.
profit motive
driving force that encourages people and organizations to improve their material well-being; characteristic of capitalism and free enterprise.
market economy
economic system in which supply, demand, and the price system help people allocate resources; same as free enterprise economy.
traditional economy
economic system in which the allocation of scarce resources, and other economic activity, is the result of ritual, habit, or custom.
public property
property that is owned by the government (for the whole public/society), such as parks and city buildings in the USA
"greed"
something in ALL of us... (remember we have UNLIMITED wants), which is a motivator to act
human capital investment
spending on training and education which allows workers to be able to produce more output in the future
Adam Smith
the "big guy" in economics/ capitalism-- said greediness actually HELPS society (due to the Invisible Hand)
"the Invisible Hand"
the idea that there is a force (our greediness) that motivates to act in certain ways (our benefits!), but in so doing we serve others/ help society gets what it wants.
competition
the struggle among sellers to attract consumers.
ration
to allocate or distribute
Scarcity
unlimited wants exceed the limited resources available to fulfill those wants