theory of economics

Economics is...

... the social science that seeks to describe the factors which determine the production, distribution and consumption of goods and services.

Goods

Tangible commodities

Services

Not tangible commodities

Private goods

Goods that are both excludable and rival in consumption, paid by consumer for own personal use

Public Goods

Goods or services that can be used by many individuals at the same time without any degradation in the benefit each person receives.

Theory

An organized, coherent set of ideas that helps us to understand, to explain, and to make predictions

Economic Model

Simplified version of reality used to analyze big economic issue

capitalism

based on private ownership of the factors of production; producers seek to produce the goods and services consumers want so they can make profit; consumers want to maximize their utility from the goods and services they buy

communism

authoritarian socialism; there is little or no private ownership of property, and government leaders are not democratically elected

socialism

an economic system in which government owns some of the factors of production; many countries with this system select their governments through democratic elections