| A | B |
|---|
| Economic System | The method used by a society to produce and distribute goods and services. |
| Factor Payments | The income people recieve for supplying factors of production, such as land, labor or capital. |
| Patriotism | The love of one's country; the passion that inspires a person to serve his or her country. |
| Safety Net | Government programs that protect people experiencing unfavorable economic conditions. |
| Standard of Living | Level of economic prosperity. |
| Traditional Economy | Economic system that relies on habit, custom or ritual to decide questions of production and consumption of goods and services. |
| Market Economy | Economic System in which decisions on production and consumption of goods and services are based on voluntary exchange in markets. |
| Centrally Planned (Command) Economy | Economic system in which the central government makes all decisions on the production and consumption of goods and services. |
| Mixed Economy | Market based economic system with limited government involvement. |
| Market | An arrangement that allows buyers and sellers to exchange things. |
| Specialization | The concentration of the productive efforts of individuals and firms on a limited number of activities. |
| Household | A person or group of people living in the same residence. |
| Firm | An organization that uses resources to produce a product which it then sells. |
| Factor Market | Market in which firms purchase the factors of production from households. |
| Profit | The financial gain made in a transaction. |
| Product Market | The market in which households purchase the goods and services that firms produce. |
| Self-Interest | One's own personal gain. |
| Incentive | An expectation that encourages people to behave a certain way. |
| Competition | The struggle among producers for the dollars of the consumers. |
| Invisible Hand | Term economists use to describe the self-regulating nature of the marketplace. |
| Consumer Sovereignty | The power of consumers to decide what gets produced. |
| Communism | A political and economic system characterized by a centrally planned economy and political power resting in the hands of the central government. |
| Authoritarian | Requiring strict obedience to authority; dictatorship |
| Collective | Large farm leased from the state to groups of peasant farmers. |
| Heavy Industry | Industry that requires a large capital investment and that produces items used in other industries. |
| Laissez-Faire | The doctrine that states that government generally should not intervene in the marketplace. |
| Private Property | Property owned by individuals or companies, not by the government or the people as a whole. |
| Free Enterprise | An economic system characterized by private or corporate ownership of capital goods; investments that are determined by private decision rather than by state control and determined in a free market. |
| Continuum | A range with no clear divisions. |
| Transition | Period of change in which an economy moves away from a centrally planned economy toward a market-based system. |
| Privatize | To sell state-run firms to individuals. |
