| A | B |
|---|
| Mixed Economy | The type of Economy the U.S. has |
| Command Economy | Marxism, communism, government controls what is produced and how much is produced |
| Market Economy | The type of economy Adam Smith advocated. |
| Market Economy (Def.) | Supply and demand will regulate the market |
| Adam Smith | Believed that self-interest and private ownership would benefit all of society |
| Demand | Willingness and ability to give up something of value in exchange for something of value |
| Elasticity of demand | Responsiveness of demand to changes in price |
| Equilibrium Price | Point where demand and supply are equal |
| Supply | Quantity of good and service producers are willing and able to sell at different prices at a particular time |
| Price Effect | Causes shifts or movements along the supply curve |
| Market Supply | Total of all individual suppliers' products in a market at a particular time |
| Market Shortage | Difference between the amount supplied and the amount demanded when the asking price is less than the market-clearing price |
| Market Surplus | Difference between the amount demanded when the asking price is greater than a market-clearing price |
| Law of Supply | Positive relationship between the quantity supplied and price of product |
| Elastic Demand | When a small change in price effects a large change in demand |
| Inelastic Demand | When a change in price does not bring about a correspondingly large change in demand, or no change at all |
