Economic Systems and Free Enterprise Flashcards
Grade 8 · Social Studies · Flashcards
Key economic concepts, systems, and vocabulary for Grade 8 Social Studies.
Flashcards
- Market Economy (Capitalism)
- Economic system where private individuals own businesses and prices are set by supply and demand
- Command Economy
- Economic system where government controls all major production and pricing decisions
- Socialism
- Economic system where government owns key industries; individuals may own some businesses
- Free Enterprise
- US economic system based on private ownership, competition, profit motive, and minimal government interference
- Supply
- The amount of a good or service producers are willing to sell at a given price
- Demand
- The amount of a good or service consumers are willing to buy at a given price
- Supply and Demand
- The interaction that determines prices in a market economy — scarcity raises prices; surplus lowers them
- Profit Motive
- The drive to earn money — key incentive for innovation and hard work in a market economy
- Consumer Sovereignty
- Consumers drive production by choosing what to buy — businesses produce what people will pay for
- Competition
- Businesses competing for customers leads to lower prices, better quality, and innovation
- Private Property
- The right to own things you earn — a fundamental principle of free enterprise
- GDP (Gross Domestic Product)
- Total value of goods and services produced in a country in one year — the standard measure of economic size
- Scarcity
- Resources are limited but human wants are unlimited — the fundamental economic problem
- Invisible Hand
- Adam Smith's idea that individuals pursuing self-interest in free markets inadvertently benefit society as a whole
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