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Economic Terms
Vocab/Defintion
| Term | Definition |
|---|---|
| Economic Wants | People’s desires that can be satisfied by consuming goods and/or services. |
| Economic Resources | Human, natural, and capital resources used to produce a good or provide a service |
| Scarcity | Wants are unlimited. Scarcity means resources are limited. Scarcity of resources forces people to prioritize wants and decide what goods and services they will seek. |
| Specialization | People focus on producing a few things instead of making everything they want by themselves. Goods and services are produced in better quality, quantity, and speed when people specialize. |
| Interdependence | People, businesses, and nations depend on the goods and services of others to satisfy the wants they cannot satisfy on their own. Specialization and the uneven distribution of resources require the interdependence of people and nations. |
| Market | Any place or system that allows buyers and sellers to exchange goods and services. |
| Money (or Currency) | A medium of exchange used to buy and sell resources, goods, or services. Money has a standardized value and can be stored for future use. Money may be gold or silver or coins or paper issued by a government. Money is not a capital resource. |
| Economic System (or Economy) | The way a society organizes to produce, distribute, and consume goods and services. The system tries to prevent surpluses (too much of a good or service) or shortages (too little of a good or service). |
| Traditional Economy | A system in which customs handed down from generation to generation determine how a society’s economy is organized to produce, distribute, and consume goods and services. |
| Market Economy | A system in which individuals and businesses make most of the major decisions about production and distribution of goods and services. |
| Command Economy | A system in which a central authority makes most of the major decisions about production and distribution of goods and services. |
| Mixed Economy | A system in which economic decisions are made by individuals, businesses, and government. Wealth can be made or lost in the market. |
| Value & Price | The worth of a good or service that is determined by the total cost of economic resources that went in to producing and providing a good or service. Price is what a seller and buyer agree on for an exchange, usually stated standard money terms. |
| Supply | The amount of a resource, good, or service that sellers are willing to sell at possible prices. Generally, higher prices force more supply. |
| Demand | How much people want of a good or service at a certain price at a certain time. Generally, higher prices reduce demand. |
Created by:
EDWARM06
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