1. Objective 3 Flashcards
By Paul Sampson

2. Traditional Economy
An economy based on agriculture and simple industry. Every person has a specific role in society that is defined by customs and traditions.
Example: Medieval Europe, some economies in Africa, Asia and South America.

3. Market (capitalist) Economy
Individual ownership and control of economic resources. Economic freedom and business competition is encouraged.
Examples: United States, Japan.

4. Industrialization
The process of creating a commercial economy by building factories for mass production of goods.

5. Nationalism
The belief that one’s country is of primary importance and in some instances that one’s country is naturally superior to all other countries.

6. Standard of Living
How well people live based on income, education, birth-rate, population density, etc.
Example: Rich vs. Poor

7. Command Economy
Government owns and controls economic resources. Reduced freedom and no business competition.
Examples: Communist nations like Cuba and North Korea.

8. Cottage Industry
Traditional industry that takes place inside the home and produces household goods like clothes and tools.
Example: Home-made clothes. A grandmother who makes quilts is like a cottage industry.

9. Tariff/Duty
A tax on imports and/or exports.

10. Free Enterprise
This idea states that choice, competition, and profit motive as the main motivations for economic growth.
Example: The United States.

11. GDP
Stands for Gross Domestic Product: it means the value of goods and services that a country produces per person.
The GDP of the United States is $47,132.

12. Labor Costs
How much an employer needs to pay laborers. Can be determined by labor laws, customs, and economic factors.
Example: Labor in Cambodia is less expensive than labor in France.

13. Trade
Exchange of goods and services.

14. Globalization
The increase of trade and idea exchange between all countries in the world.
Example: You can buy Coca-Cola in Peru.

15. Export
A good that is produced for a foreign market.

16. Agricultural Revolution
The time period when humans first domesticated plants and animals.

17. Mass Production
Production on a large scale, a characteristic of Industrialization.
Example: The Ford Focus is a Mass Produced car.

18. Demographic
A measurement having to do with a group of people. Demographics can have to do with race, age, or any other human characteristic.
Example: The average age in Minnesota is higher than in Texas.

19. Import
A foreign-produced good.

20. Subsistence Agriculture
A system where people produce just enough to survive.
Example: A farm that grows only enough food for the people that work on it.