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Flashcards in Economic Systems Deck (52)
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1

Characteristics of planned economy

Government makes all economic decisions, everyone is working class, only necessities produced, operate on social interest, income equally distributed

2

Characteristics of market economy

No government sector, everything privately owned, high competition, capital over labour, high technology, profit incentive, not everyone receives essentials, cheaper resources to maximise profit

3

Traditional economy characteristics

No money, self-sufficient, low technology, no specialisation, no surplus,mostly primary production

4

Types of Resources

Land, labour, capital, enterprise

5

Circular flow of income sectors

Firms, households, financial, government, overseas

6

Economic problem

Inability to satisfy unlimited wants with limited resources

7

Opportunity cost

What you sacrifice for something else

8

Other names for market

Capitalism, unplanned

9

Economic questions

What/how/how much/for whom to produce

10

Factors affecting supply

Natural disasters, seasons, technology, price of resources

11

Factors affecting demand

Season, income, advertising, complementaries, substitutes, population, tastes/preference

12

Investment

Money injected into firms from the financial sector, lent for future benefit

13

Taxation

A leakage of income from the households to the government

14

Government spending

An injection of spending on essential goods and services (e.g. Health)

15

Characteristics of wants

Recur, unlimited, change

16

Good

Tangible item that is sold

17

Service

Intangible concept that is sold

18

Resource

Anyone or anything used to make a product

19

Barter

A traditional economy that uses trade for any surplus

20

Subsistence

A traditional economy that is completely self-sufficient

21

When did life expectancy changes to 39 years for Burundian men?

2004

22

Economics

The study of how to satisfy unlimited wants with limited resources

23

What are the types of advertising?

Persuasive, informative

24

Consumer

Anyone who uses products

25

Consumer sovereignty

Customers decide what is sold

26

Equilibrium

The point where the demand and supply curves meet

27

Scarcity

The economic problem of having unlimited wants and not enough resources to satisfy them

28

Leakages

Money that is taken from the economy

29

Injections

Money pit back into the economy

30

How does market answer the economic questions?

What the customers want (consumer sovereignty)
Most cost effective production
Amount determined by price mechanism
For the willing and able