Economics Chapter 2: Economic Systems

The structure of methods and principles a society uses to produce and distribute goods and services.

The income people receive in return for supplying factors of production - land, labor, or capital.

The amount of money a business receives in excess of its expenses.

<p>Set of programs to protect people who face unfavorable economic conditions such as layoffs, injuries, or natural disasters.</p> Signup and view all the answers

<p>Level of economic prosperity (success, wealth, luxury).</p> Signup and view all the answers

<p>The process of bringing new methods, products, or ideas into use.</p> Signup and view all the answers

<p>Relies on habit, custom, or ritual to answer the three economic questions.</p> Signup and view all the answers

<p>What goods and services should be produced? How should these goods and services be produced? Who consumes these goods and services?</p> Signup and view all the answers

<p>Any arrangement that allows buyers and sellers to exchange things.</p> Signup and view all the answers

<p>The concentration of the productive efforts of individuals and businesses on a limited number of activities.</p> Signup and view all the answers

<p>Answers to the three key economic questions are made by voluntary exchange in markets.</p> Signup and view all the answers

<p>A person or group of people living in a single residence.</p> Signup and view all the answers

<p>An organization that uses resources to produce a product or service, which it then sells.</p> Signup and view all the answers

<p>The area of exchange in which firms purchase the factors of production from households.</p> Signup and view all the answers

<p>Households buy the goods and services that firms produce.</p> Signup and view all the answers

<p>An individual's own personal gain.</p> Signup and view all the answers

<p>The hope of reward or fear of penalty that encourages a person to behave in a certain way.</p> Signup and view all the answers

<p>The struggle among producers for the dollars of consumers.</p> Signup and view all the answers

<p>A term coined by Adam Smith to describe the self-regulating nature of the marketplace.</p> Signup and view all the answers

<p>The power of consumers to decide what gets produced.</p> Signup and view all the answers

<p>The government, rather than individual producers and consumers, answers the key economic questions.</p> Signup and view all the answers

<p>Operates in direct contrast to free market systems.</p> Signup and view all the answers

<p>Describes a range of economic and political systems based on the belief that wealth should be evenly distributed throughout society.</p> Signup and view all the answers

<p>The central government owns and controls all resources and means of production and makes all economic decisions.</p> Signup and view all the answers

<p>Limit individual freedoms and require strict obedience from their citizens.</p> Signup and view all the answers

<p>The doctrine that government generally should not intervene in the marketplace.</p> Signup and view all the answers

<p>Property owned by individuals or companies and not by the government or the people as a whole.</p> Signup and view all the answers

<p>A market-based economic system in which the government is involved to some extent.</p> Signup and view all the answers

<p>A period of change in which a nation moves from one economic system to another.</p> Signup and view all the answers

<p>The process of selling businesses or services operated by the government to individual investors, allowing them to compete in the marketplace.</p> Signup and view all the answers

<p>An economic system characterized by individual or corporate ownership of capital goods.</p> Signup and view all the answers