14 terms

The Factors of Production

Key terms from Chapter 3 in Economics: Work and Prosperity
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factors of production
economic resources use in the production of goods; the four factors are natural resources, labor, capital, and entrepreneurship
traditional economy
a system in which decisions involving the production, distribution, and comsumption of goods are based upon custom, heredity, and caste
command economy
s system in which a centralized authority determines the production and distruibution of goods and services as well as things like savings, investments, and prices
free enterprise economy
a system in which people are free to make their own economic choices
mixed economy
system that combines certain aspects of free enterprise with heavy state regulation
natural resources
includes land and other raw materials
labor
any work that contributes to the production of goods and services
subsistence economy
an economy system that provides barely enough to keep a society alive
private capitalism
the system in which the majority of a nation's capital is owned and controlled by private individuals and businesses
state capitalism
a system in which the owner of much of the nation's capital is a powerful, centralized apparatus called the collectivist state
capitalist
anyone who owns producer goods or owns a share of someone's business that produces goods
entrepreneurship
the intelligent direction and supervision of natural and human economic resources
entrepreneur
a person who undertakes management of economic enterprises on a bold scale, with some danger of losing investment of money and time
circular flow model
a simplified diagram which illustrates how resources and products move through an economic system
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