Industrialization Vocabulary

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Capitalism (Free Enterprise System / Free Market Economy)

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The United States Economic System; where individuals own the means of production and individuals, not the government, decide the what and how of production and consumption through voluntary exchanges in a 'market'.

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Market

Back

A group of buyers and sellers of a particular good or service.

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Supply and Demand

Back

The idea that the price of a good rises and falls depending on how much of the good is available (supply) and how many people want it (demand).

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High Price

Back

Low supply, high demand.

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Low Price

Back

High supply, low demand.

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Corporation

Back

A business owned by stockholders who share in its profits, if there are profits, but are not personally responsible for its debts (limited liability).

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Stockholder

Back

An individual who owns stock in a company.

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Profit

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The money left over after a business has paid the costs of providing its goods and services, although sometimes there is a loss.

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Dividend

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The portion of corporate profits paid out to stockholders.

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Essential Characteristics of Capitalism

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Private Property (Ownership of Means of Production), Profit Motive, Competition.