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Chapter 1
Term (33) | Definition |
---|---|
Needs | Things that are required in order to live |
Wants | Things that add comfort and pleasure to your life |
Goods | Tangible products |
Services | Activities that are consumed as they are produced |
Economic resources | Means through which goods and services are produced |
Factors of production | Economic resources |
Natural resources | Raw materials supplied by nature |
Human resources | People who produce goods and services |
Entrepreneur | Risk taker who uses resources to create a new product or service |
Capital resources | Products and money used in the production of goods and services (Buildings, equipment, supplies) |
The basic economic problem | Mismatch of unlimited wants and needs and limited economic resources |
Scarcity | Not having enough to satisfy everyone |
Choices | Decisions among the alternatives |
Economic decision making | Process of choosing which wants, among many, will be satisfied |
Trade-off | Giving something up to have something else |
Opportunity Cost | The value of the next best alternative that you did not choose |
Economic system | A nations plan for answering the three economic questions |
Command economy | Resources are owned and controlled by gov. |
Market economy | Resources are owned and controlled by the citizens |
Marketplace | Anywhere that goods and services exchange hands |
Traditional economy | Where goods and services are produced the way it's always been done. (used in less developed countries) |
Mixed economy | Combines elements of command and market economies. |
Capitalism | Private ownership of resources by individuals |
Private property | You can own, use, or dispose of things of value |
Freedom of choice | You are allowed to make independent decisions, and accept whatever consequences |
Profit | Money left in surplus from a business |
Consumer | Someone who buys goods and services |
Producers | Individuals and organizations that determine what will be available for sale |
Demand | Quantity of a good or service consumers are willing, and able to buy |
Supply | Quantity of a good or service that businesses are willing and able to provide |
Supply curve | Illustrates the relationship of the price of a product, and the quantity businesses will supply. |
Competitors | Businesses offering similar products to the same customers |
Market price | Point where supply and demand are equal |