Flashcards About Econ chapter 2
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Transition
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Period of change in which an economy moves away from centrally planned toward a market based system
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Free enterprise
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Economic system that permits the conduct of business with minimal government intervention
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Privatize
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To sell to individuals state run firms which then are allowed to compete with one another in the marketplace
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Laissez faire
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Doctrine that government generally should not intervene in the market place
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Continuum
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Line with no clear divisions
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Under communism workers fail to increase production because they lack a
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Incentive
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Households purchase goods and services in the __ market
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Product
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Government makes limited intervention under free ____
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Enterprise
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An economy controlled by the government is
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Centrally planned
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The philosophy advocating equal distribution of wealth
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Socialism
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The power of insinuates ro decide what gets produced is ____
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Consumer sovereignty
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Income people receive for supplying land labor or capital is called
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Factor payments
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What are the three economic questions
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What gods and services should be produced How should they be produced Who consumer then
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Economic concept necessitating choices and priorities in any society
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Scarcity due to limited resources
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Economic question answered by basic social values and goals
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Who consumes
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Five basic economic goals guiding society's choice of systems
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Efficiency, freedom, security and predictability, equity, growth and innovation
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Four types of economic s
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Market comment traditional mixed
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A system to protect people experiencing unfavorable economic conditions
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Safety net
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Economic decisions are based on exchange or trade
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Market Econ
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Method used by a society to produce and distribute its goods and services
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Economic system.m
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Concentration of the productive efforts of individuals and firms on a limited number of activities
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Specialization
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Self regulation of the market place
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Invisible hand
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Requiring strict obedience to an authority
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Authoritarian
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A large Soviet farm leased by the state to groups of peasant farmers
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Collective in
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Requires a large capital Investment and produces items used by other
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Heavy industry
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Product markets the houses buy from stores factor markets the firms buy
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The difference between product market and factor market
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The prices firms sell their products for end up being close to the price they're produced for
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What did Adam smit mean by the invisible hand of the marketplace
