| A | B |
|---|
| traditional economy | an economy in which production is based on customs and traditions. |
| command economy | an economy in which a central government authority makes all basic economic decisions and controls the factors of production. |
| market economy | an economy in which the government has little say in what, how, and for whom goods are produced and in which the factors of production are owned by individuals. |
| market | AKA market place the free exchange of goods and services. |
| self-interest | the impulse that encourages people to fulfill their needs and wants. |
| incentive | something that encourages an action or effort. |
| mixed economy | an economy that combines elements of the traditional, market, and command economic models. |
| authoritarian socialism | AKA communism is an economy in which the government owns or controls nearly all factors of production. |
| communism | economic system in which the government owns or controls nearly all factors of production. |
| capitalism | a market-based economic system in which individuals own the factors of production. |
| democratic socialism | an economic system in which some means of producing and distributing goods are owned or controlled by an elected government. |
| free enterprise | system in which private business operates with minimal government involvements. |
| private property | property that is owned by individuals and businesses, rather than the government. |
| contract | a legally binding agreement, either oral or written, between individuals, such as to buy and sell goods and services. |
| competition | a state of rivalry among sellers of the same or similar products, in which each seller tries to gain a larger share of a market and to increase profits. |
| product market | the market in which producers offer and consumer purchase final goods and services. |
| resource market | the market in which households exchange resources with business and the government. |
| income | money payments that households receive from business firms and the government in exchange for resources. |
| full employment | the lowest possible level of unemployment in an economy. |
| price stability | the condition that exists when over-all price levels remain relatively constant over a period of time. |
| standard of living | people’s economic well-being as determined by the quantity of goods and services they consume in a given time period. |
