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| The set of mechanisms and institutions that resolves the what, how, and for whom questions for an economy. |
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| Is a market system in which the costs for goods and services are set available by the sellers an consumers accepting it, in which the laws an forces of supply an demand are open from any meeting by a government, price-setting monopoly, or other authority |
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| An economic system in which all resources are government-owned and all productions is directed by the central plans of government |
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| An economic system that mixes central planning with competitive markets. |
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| An economic system shape largely by custom or religion. |
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| Transitional/Developing Economy |
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| An economic system in the process of shifting from central planning to competitive markets. |
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| He created the coordination, that occurs through markets take place because of what he called the "invisible hand" of market competition. The process is that no individual or small group coordinates market activities. Rather, it is the voluntary choices of many buyers and sellers responding only to their individual incentives. Although each individual pursues his or her own self-interest, the "invisible hand" of competition promotes the general welfare. |
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| According to Marx, capitalism had the seeds of its own collapse. Communism was the inescapable end to the operation of evolution beginning with feudalism and going through capitalism and socialism. Marx's main thoughts about economy were th labor theory of value, lowering rates of profits, and raising of attention of wealth. |
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| Also known as the (production possibilities frontier) shows the possible combinations of two types of goods that can be produced when available resources are employed efficiently. |
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| Law of Increasing Opportunity Costs |
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| Each addition increment of one good requires the economy to give up successively larger increments of the other good. |
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| An expansion of the economy's production possibilities, or ability to produce. |
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| The ability to make something using fewer resources than other producers require. |
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| The worker, firm, region, or country with the lowest opportunity cost of producing an output should specialize in that output. |
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| Occurs when individual workers focus on single tasks, enabling each worker to become more efficient an productive |
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| Organizes the production process so that each worker specializes in a separate task. |
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| A system of exchange in which products are traded directly for other products. |
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| Anything that everyone is willing to accept in exchange for goods and services. |
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