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PCS Economics
Economics Vocabulary Chapter 3
| Question | Answer |
|---|---|
| command economy | government decides; no incentive; don't get paid more if you make more |
| market economy | consumers decides incentives - the more you make the more you get paid; government has to become a consumer sometimes (public schools, roadways) |
| economic freedom | the ability of people to make their own economic decisions without interference from the government |
| full employment | a condition in which everyone who wants to work can find a job |
| economic equity | the fairness with which an economy distributes its resources |
| economic growth | a condition in which an economy is expanding and producing more and better goods |
| economic security | the idea that the less fortunate members of society should get the economic support they need to live a decent life |
| economic stability | a condition in which the goods and services people count on are available when they want them |
| economic system | a society's way of coordinating the production and consumption of goods and services |
| traditional economy | an economic system in which decisions about production and consumption are based on custom and tradition (focus on stability and security)_ |
| command economy | an economic system in which decisions about production and consumption are made by a powerful ruler or government (focus on equity and security) |
| market economy | an economic system in which economic decisions are left up to individual producers and consumers (focus on efficiency and freedom) |
| free market economy | an economic system in which the workings of the market are not planned or directed |
| circular flow model | a diagram that shows the circular movement of money, resources, and goods and services among households and producers in an economy |
| household | a person or a group of people living together |
| firm | an organization that uses resources to produce and sell goods or services; a business |
| product market | a market in which firms sell goods and services to households |
| factor market | a market in which households sell land, labor, and capital to firms |
| factor payment | income earned when an individual sells or rents a factor of production that he or she owns (ex. wages are a factor payment made to workers in exchange for their labor) |
| Industrial Revolution | a period of rapid industrial growth and development during the 1700s and 1800s |
| capitalist | an individual investor who accumulates capital, such as machinery, factories, and railroads |
| capitalism | the free market economic system |
| socialism | a political and economic philosophy based on collective or government ownership of a society's resources and means of production, with the goal of achieving social and economic equality |
| communism | a political and economic system in which all property and wealth is collectively owned by all members of society; the final stage of socialism in Marxist theory |
| economic planning | the process by which economic decisions are made or influenced by central governments rather than by private individuals |
| mixed economy | an economic system in which both the government and individuals play important roles in production and consumption; most modern economies are mixed economies |
| public works | government financed projects such as dams, highways, and bridges |
| transfer payment | a government payment to a household or firm for which the payer receives no good or service in return; examples include Social Security checks and unemployment benefits |
| free enterprise system | an economic system in which the means of production are mostly privately owned and operated for profit |
| laissez-faire | the principle that government should not interfere with the workings of the economy; a French term meaning "let them do" |
| contract | an agreement between a buyer and a seller |
| property rights | the rights of those who own land, buildings, or other goods to use or dispose of their property as they choose |
| intellectual property | creations of the mind that have commercial value, such as inventions and works of art |
| patent | a legal protection that gives inventors the sole right to make, sue or sell their inventions for a fixed number of years |
| copyright | a legal protection that gives creators and publishers of books, music, software and artistic works the sole right to distribute, perform, or display that work |
| profit | the money earned by a business after subtracting its operation costs |
| profit motive | the money earned by a business after subtracting its operation costs |
Created by:
Ms.Sala
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