Consumer Education and Economics Chapter 5 – Flashcards
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economics
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The social science that examines how societies use scarce resourses to produce and distribute goods and services that satisfy peoples' wants and needs.
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economic system
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The way a society uses resources to satisfy its peoples' needs and wants.
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traditional economy
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An economic system in which decisions about what to produce, how, and for whom are based on traditional customs and beliefs of society.
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command economy
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An economic system in which decision about what to produce, how, and for whom are decided by a cental government.
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market economy
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An economic system in which decisions about what to produce, how and for whom are decided by individuals acting in their own self-interest.
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mixed economy
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A combination of the command and market economic systems.
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free enterprise
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An economic system in which individuals are free to own and control business enterprises that compete for profit with a minimum of government regulation.
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profit
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Earnings after all costs of production have been paid.
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capital
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Machines and technology used in the production of goods and services.
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productively
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A measure of the efficiency with which goods and services can be produced.
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corporation
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An organization that is owned by many people but treated by law as a single entity separate from its owners.
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shareholders
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People who have purchased shares of stock in a corporation and are therefore part-owners of the company.
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demand
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The quanitity of a particular good or service that consumers are willing and able to buy at a given price.
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law and demand
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Principle stating that when the price oa a product goes down, demand for that product will generally go up; when the price goes up, demand will generally go down.
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supply
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The quantity of a particular product that producers are abel and willing to make available for sale at a given price.
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law of supply
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Principle stating that when the price of a product goes up, the supply will generally go up; when the price goes down, the supply will generally go down.
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competition
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Rivalry between two or more businesses that offer similar goods or services. Each triel to win the lager share of the market.
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Social Security
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An insurance program that is sponsored by the federal governement and pays benefits to qualified people.
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Medicare
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A program that pays some of the costs of medical and hospital care for people who are 65 and older anf for some people under 65, such as those who are disabled.
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monopoly
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A situation in which a single company controls the supply of a good or service for which there is no close substitute. Also know as a trust.
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antitrust laws
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Laws designed to regulate unfair business practices that reduce competition.
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tax
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A required payment to a local, state, or national government.
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revenue
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Money collected or received by a government for public use.
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proportional tax
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A tax that take the same percentage out of everyone's income.
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progressive tax
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A tax that takes a larger percentage of the income of high-income people than of low income people.
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regressive tax
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A tax that takes a larger percentage of the income of low-income people than of high-income people.
