| A | B |
|---|
| economic system | an organization of choice whose function is to allocate scacre resources among alternative uses to imrpove human welfare |
| guilds | forerunner of unions |
| mercantilism | economic system of the 17th century in Europe |
| natural resource | not man-made |
| human resource | workers and their skills |
| capital resource | tools and machinery |
| traditional model | economic questions are based on tradition and customs |
| market model | consumers make decisions |
| command model | small groups of planners make economic decisions |
| scarcity | only so much of anything available |
| opportunity cost | loss of your next best choice |
| market price | orice at which something is actually sold at |
| natural price | when the price is neither more nor less than the total cost |
| effectual demand | wanting something and being able to afford it |
| absolute demand | wanting something whether you can afford it or not |
| means of production | factories,farms,mines |
| means of distribution | trains,trucks,planes,ships |
| supply and demand | small amount of something price goes up/large amount of something price is lower |
| laissez faire | "leave business alone", govt. role is limited |
| proletariat | worker |
| perestroika | restructuring |
| bourgeoisie | middle class |
| industrial revolution | major changes in business and trade |
| karl marx | wrote communist manifesto in 1848 |
| democratic socialism | acheived slowly through legal means/govt. owns and operates major means |
| 3 stages of communism | dictatorship of the proletariat/withering away of society/classless society |
| hanseatic league | medeival trade league made up of 80 cities |
| what does the hanseatic league do | protect members/ regualte price/guarantee quality |
| Adam smith | wrote A wealth of nations in 1776,criticized mercantilism |
