| A | B |
|---|
| economic system | the method used by a society to produce and distribute goods and services |
| factor payments | the income people receive for supplying factors of production such as land, labor, or capital |
| patriotism | the love of one's country |
| safety net | government programs that protect people experienceing 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 economy | economic system in which the central government makes all decisions on the production and consumption of goods and services |
| command economy | economic system in which a central authority is in command of the economy |
| 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 |
| 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 in a certain way |
| competition | the struggle among producers for the dollars of consumers |
