Economic Systems Flashcard

Front

Economic System

Back

Structure and processes that a society uses to allocate its resources and conduct economic activities

Front

Explain the concept of scarcity in an economic system.

Back

Limited availability of resources

Front

What is the difference between positive economics and normative economics?

Back

Positive economics is the study of what is, while normative economics is the study of what ought to be.

Front

Tradeoff in the context of an economic system

Back

Decision to give up one thing in exchange for another

Front

How is cost-benefit analysis used in economic decision making?

Back

By comparing the costs and benefits of a decision to determine its economic viability.

Front

What role do incentives play in an economic system?

Back

Incentives provide motivation for individuals and businesses to make certain economic choices.

Front

Economy

Back

System of production, distribution, and consumption of goods and services within a society or a country

Front

Characteristics of a market economy

Back

Private ownership of goods and services, free competition, profit motive, and minimal government intervention

Front

What are the key features of a command economy?

Back

Central planning by the government, government ownership of resources and production, and limited individual freedom in economic decision-making

Front

Compare and contrast traditional and mixed economies.

Back

Traditional economies rely on customs and traditions, while mixed economies combine elements of both market and command economies.