EPF Ch 6 Vocab Pt1

the structure of methods and principles that a society uses to produce and distribute goods and services

• economic system
• factor payment
• profit

the income people receive in return for supplying factors of production

• profit
• traditional economy
• factor payment

the amount of money a business receives in excess of expenses

• specialization
• profit
• market

a set of government programs that protect people who face unfavorable economic conditions

• traditional economy
• safety net
• free market economy

level of economic prosperity

• standard of living
• product market
• self-interest

the process of bringing new methods, products, or ideas into use

• firm
• factor market
• innovation

an economic system that relies on habit, custom, or ritual to decide the three key economic questions

• market
• traditional economy
• specialization

any arrangement that allows buyers and sellers to exchange things

• household
• specialization
• market

the concentration of the productive efforts of individuals and businesses on a limited number of activities

• specialization
• free market economy
• household

and economic system in which decisions on the three key economic questions are based on the voluntary exchange in markets

• firm
• free market economy
• factor market