/
Economic Concepts Overview
Save to my account
Sign up
Economic Concepts Overview
17 Vocabs
Study
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
A contract that the individuals freely choose their legal agreements, including business, job, or purchase commitments. Not forced contract
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
A public transfer payment is a payment in which the government transfers income from taxpayers to recipients who do not provide anything in return. Social Security Benefits – Payments to retired workers or disabled individuals.
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. Financial aid to students (scholarships) or specific industries (farm subsidies).
17
Question
What are transfer payments?
Answer
Transfers of income from one person or group to another even though the receiver does not provide any goods or services in return.