24 terms

Market Economy

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capital goods
tool/equipment/manufactured good used to produce other goods and services
household
(individuals) basic unit or consumer sector consisting of all persons who occupy a house
corporation
form of business organization recognized by law as a separate legal entity. limited liability. can raise stocks and bonds
command economy
economic system controlled by the gorernment
consumer sovereignty
the role of consumer as the ruler of the market, determining what products will be produced
entrepreneur
risk-taking individual in search of profits; one of 4 factors of production
factor market
market where resources are bought and sold
firm
business that hires factors of production and organizes factors to produce goods
labor
people with all their abilities and efforts (work)
market
meeting place for buyers and sellers
market economy
economic system in which demand, supply, and the price system help people make desicions; free enterprise economy
money
anything that serves as a medium of exchange, a measure of value and store value
opportunity costs
cost of the next best alternative use of money, time, or resources when one choice is made rather than another
product market
market where goods and services are offered for sale
factors of production
productive resources that make up the 4 categories of land, capital, labour, and entrepreneurship
scarcity
economic problem where there are scarce resources and unlimited want
tradeoff
alternatives that must be given up when one is chosen rather than another
money
it prevents barter, makes exchanges go by smoother and makes it easier for firms to get what they want
firms
decide what to produce
consumer
decide what to purchase
market economy
individual decisions and property rights are necessary for a __________________ to operate
corporation
infinite life, limited liability, can raise money for stocks and bonds
proprietorship
a single owner
partnership
2 or more owners
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