| A | B |
|---|
| Market | To put a good out in the public to sell |
| The Wealth of Nations | Book by Adam Smith that describes the Invisible Hand theory |
| Capitalism | An economic system in which capital goods are owned, operated and traded by private individuals, businesses, or corporations for the purpose of profit |
| Private Property | Right to own land, buildings & other commodities protected by 5th amendment |
| Profit motive | Driving force that encourages people to improve their material well being |
| Profit | The increase in wealth that an investor has from making an investment, taking into consideration all costs associated with that investment including the opportunity cost of capital. |
| Wages | Money paid to a worker on an hourly basis |
| Division of Labor | Breaking down a job into separate , smaller tasks to be performed individually |
| Pricing | The determining of how much a business can get for its goods in the market |
| Incentive | Rewards that are offered to try to persuade people to take certain economic actions |
| Consumer Sovereignty | Consumers determine what products are produced |
| Laissez-faire | Hands off economic plan for a govt no govt regulation |
| Invisible Hand | Idea from Adam Smith that consumers should stand freely in a market in pursuit of their own interests |
| Communist Manifesto | Book where Karl Marx starts the idea of Communism or where the govt owns all means of production |
| Fiscal Policy | Plan of spending & projected money coming into a business |
| Deficit spending | Passing a budget where the govt will a deficit at the end of the fiscal year |
| Traditional Economy | System in which the decision of what, how and for whom things are produced are made by custom or habit |
| Command Economy | System where the major economic decisions are made by the central govt |
| Market Economy | System in which individuals own the factors of production and make economic decisions through free interaction |
| Mixed Economy | System having characteristics of more than 1 type of an economy in it |
| Patents | Exclusive rights to sell any new art, machine, item of manufacture or composition |
| Copyrights | Exclusive rights to control, publish & sell an original work (intellectual) |
| Voluntary Exchange | Act of buyers & sellers freely and willingly engaging in market activity |
| Full Employment | Lowest sustainable unemployment rate possible for an economy |
| Efficiency | Using resources in such a way to maximize production |
| Productivity | Degree that resources are being used efficiently to produce goods & services |
| Specialization | When people or companies concentrate on goods or services they can produce better than others |
