| A | B |
|---|
| Economics | the study of how people meet their basic needs |
| Cottage Industry | producing goods at home by hand |
| Subsistence Agriculture | farmers grow only enough to feed themselves and their families |
| Profit | the reason investors invest money in businesses |
| Socialist economy | the government owns some basic industries but private businesses are also allowed |
| Communist economy | Private property is abolished; everyone works for the common good and shares equally in the economy; government directly manages the economy |
| Supply | the amount one has of goods/services |
| Demand | how many people want to purchase goods/services |
| Traditional economy | relies on growing just enouigh to feed the community and producing needed items at home |
| Free Enterprise System | Emphasizes private ownership of businesses, self-regulation of the economy, and the law of supply and demand |
| law of supply and demand | prices are determined by the amount of an item available and how many people what that item |
| scarcity | the basic problem of economics |
| Karl Marx | father of modern Communism |
| Adam Smith | father of modern Capitalism |
| Mercantilism | economic system in Europe before Capitalism and Communism |
| Sweden and Israel | examples of modern socialist countries |
| Cuba and Chine | examples of modern communist countries |
| United States of America | an example of a modern free enterprise nation |
| privatization | selling off publicly owned businesses |
| commercial industry | goods are manufactured in factories to sell to others |
