economics vocabulary economy- a system for producing, and distributing goods and services to fulfill...

EconomicsEconomics

VocabularyVocabulary

Economy-

• A system for producing, and distributing goods and services to fulfill peoples wants (needs)


Capitalism - Free Enterprise or Free

Market• A type of economic

system where the individual decides how goods and services will be produced and distributed

• Little to no government control of the economy


Socialism-• A type of economic system

where the government controls the major industries in a country (electric companies, oil, health care)

• The government decides how these goods and services will be produced and distributed. Some private ownership is allowed.


Communism-• The government owns and

controls all the production of goods and services

• There is no private ownership, everything is owned collectively by the people and the government decides who gets what and who can use what. Cuban Flag


Money-

Anything that is accepted as payment for goods and services


Supply- The amount of a

product made and sold in an economy at a certain price


Demand- Amount of people who want to buy a good or service at a certain price


Securities, stocks and shares-

• Ownership in a business or corporation


Buyer-

A person who is willing to buy goods at a certain price


Seller- A person willing

to sell a good or service at a certain price


Goods-

Physical products that can be bought or sold

Examples-- food, clothes, car


Services- Work that you will

pay another person to do for you

Examples--fix your car, go to a doctor, take care of your yard


Invest- To place your

money into business, the stock market or other areas of the economy where you hope your money will make a profit


Budget- A plan for how

you will spend and save money


Profits- The money you have

left over after you subtract what it cost you to make something from what you were able to sell it for

Buyer’s cost - Seller’s cost = Profit

What is an economy?What is an economy?

• An economy is a system for producing, and distributing goods and services to fulfill peoples wants (needs).

• You must have human wants in order to have an economy.

• Everyone wants something.

Human Wants?Human Wants?

2 types of wants that an economy helps to provide:

1. Physical- food, water, oxygen, shelter, clothing

Items that keep you alive.

1. Emotional- love, feel good about yourself, happy.

Factors of ProductionFactors of Production

The resources that produce the goods and services that satisfy people’s wants.


Land- Soil, minerals, water,

animals, plants that grow on the Earth

Basically, it is all of the Earth’s natural resources.


Labor -

The time and energy it takes people to produce goods and services


Capital-

Is anything that can be saved and used to produce other goods and services

Examples- tools, machinery, or money

Test YourselfTest Yourself

1. An ______________ is a system, in which goods and services are produced, and distributed to satisfy peoples’ wants.

2. Name the three (3) factors of production.

3. The three factors of production are combined together to make _____________ and ______________ to satisfy people’s wants.


1. An ECONOMY is a system, in which goods and services are produced, and distributed to satisfy peoples’ wants.

2. Name the three (3) factors of production. LAND, LABOR AND CAPITAL

3. The three factors of production are combined together to make GOODS and SERVICES to satisfy people’s wants.

Types of EconomiesTypes of Economies

1. Traditional2. Command

• Socialism• Communism

3. Market • Capitalism

4. Mixed


1. Traditional• An economic system

based on traditions and customs

• Most traditional economies are found in less developed countries of the world.


2. Command• The government or

central authority decides how the factors of production will be used

• Many command economies are found in dictatorships.

Command EconomyCommand Economy

This theory was started by Karl Marx and Friedrich Engel and includes:1.CommunismAll factors are owned by the government2. SocialismWealth should be distributed equally

Karl Marx


3. MarketIn this type of economy private

individuals decide how the factors of production are used, and how goods and services are produced and distributed.

There is little or no government control of the economy.

It is based on competition for profits.


4. Mixed• A combination of

different types of economies

• Examples- Capitalism and Socialism


1. ___ One of the two creators of communism A. Adam SmithB. Traditional

2 . ___ This type of economy has little or no private C. Karl Marxownership of property, and the factors of production D. Communismare owned collectively. E. Social ism

F. Capitalism3. ___ How the factors of production are used

in this type of economy are based on customs and traditions

4. ___ Author of The Wealth of Nations.

5. ___ Type of economy where the government controls the major industries in the country; and provides many services for the people, but this comes with very high taxes.

6. ____In this type of economy the individual controls the factors of production and decides how they will be used.

7. Why is America considered a mixed economy?


1. C One of the two creators of communism A. Adam SmithB. Traditional

2 . D This type of economy has little or no private C. Karl Marxownership of property, and the factors of production D. Communismare owned collectively. E. Social ism

F. Capitalism3. B How the factors of production are used

in this type of economy are based on customs and traditions

4. A Author of The Wealth of Nations.

5. E Type of economy where the government controls the major industries in the country; and provides many services for the people, but this comes with very high taxes.

6. F In this type of economy the individual controls the factors of production and decides how they will be used.7. Why is America considered a mixed economy? ALTHOUGH WE ARE PRIMARILY A MARKET

(CAPITALISM) ECONOMY, WE HAVE SOME SOCIALISM IN THE FORM OF WELFARE AND SOME OTHER PUBLIC SERVICES.

economics vocabulary economy- a system for producing, and distributing goods and services to fulfill...

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