answering the three economic questions

Safety net:

government programs that protect people experiencing unfavorable economic conditions.

Command economy:

economic system in which central government makes all decision on the production and consumption of goods and services.

Centrally planned:

economic system which the central government makes all decision on the production and consumption of goods and services

what need and wants are answered more fairly with government involvenmetn

education, health care, employment, mass transit

5 basic economic goals

efficiency, freedom, security and predictability, equity and growth innovation

world freest market located

hong kong

Free enterprise:

investments that are determined by private decision rather than by state control.

Collective:

large farm leased form the state to groups of peasant farmers.

Standard of living:

level of economic prosperity

free market economy: self-interest

motivates consumers and producers

what needs and wants are hard to answer?

national defense, roads and highway systems, conservation, environment protection

Self-interest:

one's own personal gain.

Household:

person or a group of people living in the same residence.

Private property:

property owned by individuals or companies not by the government o the people as a whole.

free market economy:competition

regulates production, buying and selling

Traditional economy:

relies on habit, custom, or ritual to secede question of production and consumption of goods and services.

Authoritarian:

requiting strict obedience to and authority, such as dictator.

economic concept necessitating choices and priorities in any society.

scarcity - resources are limited.

Privatize:

to sell to individuals state-run firms, which are the allowed to compete with one another with one another in the marketplace.

4 main kinds of economies

traditional, market, centrally planned and mixed.

free market economy: firms

use resources to produce products, then sell them

three economic questions answered

what goods and services should be produced? how should these goods and services be produced? who consumes these goods are services

economic question answered by basic social values and goals?

who consumes which goods and services?

Factor market:

market in which firms purchase the factors of production from households.

Firm:

organization that uses resources to produce a product, what it then sells.

free market economy: individuals and businesses

own factors of production: produce and buy what they want

free market economy: households

own land, labor, and capital: consume goods and services

government north north Korea's government.

owns all property and economic output; there's is some private production,

Transition:

period of change in which an economy moves away from a centrally planned economy toward a market-based system.

Socialism:

philosophy based on the belief that democratic means should use to evenly distribute wealth throughout a society.

Market economy:

production and consumption of goods and services are based on voluntary exchange

Laissez faire:

the doctrine that states that government generally should not intervene in the marketplace.

Profit:

the financial gain made in transactions.

Factor payments:

the income people receive for supplying factors of production land, labor, or capital

Patriotism:

the love of one's country: the passion that inspires a person to serve his or her country.

Economic system:

the method used by a society to produce and distribute good and services.

Consumer sovereignty:

the power of consumers to decide what gets produced.

Invisible hand:

the self-regulating nature of the marketplace.

Competition:

the struggle among producers for the dollars of consumer; the rivalry among sellers to attract customers while lowering costs.

Continuum:

a range with no clear divisions.

Mixed economy:

Mixed economy: combine the free market with limited government involvement.

Heavy industry:

a large capital investment and that produces items used in other industries.

Incentive:

an expectation that encourages people to behave in a certain way.

Market:

arrangement that allow buyers and sellers to exchange things

why is it one of the freest

as a special administrative region of china, hong kong is being allowed to continue under the free economic system introduced during British rule.

soviet union main goal

building national power and prestige

intervention less extreme in china's economy

central planning, and one quarter of all enterprise are at least partly owned by individuals.

Communism:

centrally planned economy with all economic and political power resting in the hands of the central government.

Specialization:

concentration of the productive efforts of individual and firms on a limited number of activities.

roles of central government: USSR

control land, labor, and capital decide what, how much, and how to produce and distribute goods and services