Market Economy Economics Vocab Market Economy Characteristics More Vocab Potpourri
The government does this to pay for public goods and services like roads, libraries, parks
What is collecting taxes?
In the book Grandpa’s Corner Store, a new large supermarket is being built. This will create ___________ in the neighborhood and give consumers a choice of where to shop.
What is competition?
3 Questions that must be answered in order to create a Market Economy. (100 pts for each question)
What goods and services will be produced? How will the goods and services be produced? Who will consume the goods and services?
Within the circular flow model, this is exchanged for income. (For example, a worker gives this in order to get paid….)
What is labor, OR human resources?
Private businesses are unable or unwilling to produce these– so the government does.
What are public goods and services??
Not enough of something
What is scarcity?
When you make an economic choice, this is the second thing you wanted most and had to give up
What is opportunity cost?
Goods that a country buys FROM another country. Example: the U.S. buys oil from countries in the middle East
What are imports?
A market economy is driven by the interaction between these two groups. Hint: People who buy and people who sell
What are consumers and producers?
The production of a good or service is broken down into different steps with different workers performing each step (assembly line uses this)
What is division of labor?
This allows prices to go low and gives consumer choices of where to shop.
What is competition?
Consumers are king and determine what is produced.
What is consumer sovereignty?
Almost everything is owned and controlled by individuals and businesses (not by the government)
What are private property rights?
An example of this is farmers grow crops, while doctors help sick people. Then they rely on “trade” (money) for other needs and wants.
What is specialization?
Buyers use their income to freely trade for goods and services provided by sellers.
What is voluntary exchange?
Things in nature people see as useful for production (trees, water, wind energy)
What are natural resources?
These can be positive (sales/discounts) or negative (fees/fines)
What are incentives?
A person who is jobless, looking for a job, and available for a job.
What is unemployed?
There is no end to the number of things people want.
What are unlimited wants?
People who are working or are looking for work make up this.
What is the labor force?
This happens to price when supply is low and demand is high.
What is price increase?
The Kroger brand “Toasted Oats” instead of Cheerios OR The PS3 instead of the Wii
What are substitute goods?
The gas wars in Houston (competition) caused this to happen. Consumers were very happy (except for the long lines!)
What is price decrease?
These are economic changes that affect employment.
What is global competition, OR changes in competition or technology, OR changes in demand for natural resources?
Both specialization and division of labor will cause this.
What is increased productivity?