Economics Ch 2 JA
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Created by:
cltee3 Teacher on January 22, 2012
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Vocabulary
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28 terms
Terms | Definitions |
|---|---|
 Free Enterprise | The condition that allows people to freely make choices in their economics roles |
| Private property | resources and products owned by individuals or businesses |
| specialization | process in which businesses and people focus on producing one or a few parts of an entire product |
| Voluntary Exchange | Everyone is dependent on many other people to voluntarily produce and exchange products |
| price system | arrangement that uses monetary prices as messages to facilitate exchanges between buyers and sellers |
| market competition | rivalry among businesses for resoruces and customers |
| market product | sum of all individual demands for the product; shows how total quantity demanded of a good varies as price of the good varies |
| Entrepreneurship | motivation that drives busieness leaders to compete and react to changing conditions in the market |
| command system | economic system which the government holds most property rights |
| traditional system | economic system in which people rely on tradtions and customs to make what, how and for whom choices |
| mixed systems | economic system that blends voluntary exchange, government command and traditional elements of economic choice making |
| circular flow of money, resources, and products | economic activity that happens and that you see every day (page 23) Look a it |
| making flow grow | flow of resources into businesses (page 23) |
| money | payment for goods and services |
| barter | exchange for goods and services (trade) |
| medium of exchange | what you exchange your labor for (money, hamburgers, kisses) |
| store of value | you can hold on to your money and save it for another day (not so with hamburgers or kisses) |
| measure of value | money indicates a fixed standard |
| Adam smith | Studied economics before there was economics |
| Full employment | all people in the labor force are able to find work |
| economic growth | increase in output of goods and sevices in the U.S. econlmy during a year |
| economic freedom | freedom of choice in employment, buyiing selliing, use of time, other decisions related to our economy |
| economic security | basic needs are met |
| economic equity | fairness and impartiality is open to all |
| efficiency | getting the maximum outpuf from the resources used to produce goods and services |
| price stability | The condition that exists when overall price levels remain relatively constant over a period of time. |
| Smith | believed that people make exchanges to obtain what they want and that the purpose of production is to satisfy consumers |
| currency | paper money and coin |
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