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Economic Concepts Overview
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Economic Concepts Overview
Economic Concepts Overview
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1
Question
What is capitalism?
Answer
An economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.
2
Question
What is an externality?
Answer
A side effect of a transaction that affects someone other than the producer or the buyer.
3
Question
What is a free contract?
Answer
An agreement between private individuals or entities that is not subject to government interference.
4
Question
What is a free enterprise system?
Answer
An economic system in which private business operates in competition and largely free of state control.
5
Question
What is infrastructure?
Answer
The basic physical and organizational structures and facilities (e.g., buildings, roads, and power supplies) needed for the operation of a society or enterprise.
6
Question
What is legal equality?
Answer
The principle that everyone should have the same legal rights.
7
Question
What is a modified free enterprise economy?
Answer
A market economy in which the government intervenes to some extent.
8
Question
What is a negative externality?
Answer
A cost suffered by a third party as a result of an economic transaction.
9
Question
What is open opportunity?
Answer
The concept that everyone can compete in the marketplace.
10
Question
What is a positive externality?
Answer
A benefit received by a third party as a result of an economic transaction.
11
Question
What is profit?
Answer
The financial gain made in a transaction.
12
Question
What is profit motive?
Answer
The incentive to make money.
13
Question
What are public goods?
Answer
Goods or services that are available to all members of society.
14
Question
What are public transfer payments?
Answer
Redistribution of income in the market system.
15
Question
What is a safety net?
Answer
Government programs that protect people experiencing unfavorable economic conditions.
16
Question
What is a subsidy?
Answer
A government payment that supports a business or market.
17
Question
What are transfer payments?
Answer
Redistribution of income in the market system. (Synonymous with public transfer payments)