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12 ECON Vocab 1-2-18
Ponder - Economics Vocab CH 1, 2, 18
| Term | Definition |
|---|---|
| Value | worth of a good or service as determined by the market |
| economics | study of how people try to satisfy their needs and wants through the use of limited resources |
| capital | tools, equipment, and factories used in the production of goods and services; one of four factors of production |
| scarcity | fundamental economic problem facing all societies that results from a combination of scarce resources and people's virtually unlimited wants |
| opportunity cost | cost of the next best alternative use of money, time, or resources when one choice is made rather than another |
| wealth | sum of tangible economic goods that are scarce, useful, and transferable from one person to another; excludes services |
| labor | people with all their abilities and efforts; one of four factors of production |
| trade-offs | alternative choices made by consumers in the marketplace |
| standard of living | quality of life based on ownership of necessities and luxuries that make life easier |
| good | tangible economic product that is useful, relatively scarce, transferable to others; used to satisfy wants and needs |
| capital good | tool, equipment, or other manufactured good used to produce other goods and services; a factor of pro¬duction |
| consumption | the final use of goods and services. |
| Need | basic requirement for survival; includes food, clothing, and/or shelter |
| want | way of expressing or communicating a need; a broader classification than needs |
| service | work or labor performed for someone; economic product that includes haircuts, home repairs, forms of entertainment |
| production possibilities frontier | diagram representing maximum combinations of goods and/or services an economy can produce when all productive resources are fully employed |
| production | process of creating goods and services with the combined use of land, capital, labor, and entrepreneurship |
| factor market | market where productive resources are bought and sold |
| durable good | any good that lasts three years or more when used regularly |
| free enterprise economy | economy in which consumers and privately owned businesses make the majority of the WHAT, HOW, and FOR WHOM decisions |
| Social Security | federal program of disability and retirement benefits that covers most working people |
| economic system | organized way in which a society provides for the wants and needs of its people |
| fixed income | income that does not increase even though prices go up |
| capitalism | economic system in which private citizens own and use the factors of production in order to generate profits |
| command economy | economic system characterized by a central authority that makes most of the major economic decisions |
| mixed economy | people carry on their economic affairs freely, but are subject to some government intervention and regulations. |
| profit | the extent to which persons or organizations are better offat the end of period than they were at the beginning. |
| voluntary exchange | act of buyers and sellers freely and willingly engaging in market transactions; characteristic of capitalism and free enterprise |
| private property rights | fundamental feature of capitalism, which allows individuals to own and control their possessions as they wish; includes both tangible and intangible property |
| modified private enterprise economy | free enterprise market economy where people carry on their economic affairs freely, but are subject to some government intervention and regulation |
| competition | the struggle among sellers to attract consumers while lowering costs |
| economy | the management of the resources of a community, country, etc., especially with a view to its productivity which includes frugality in the expenditure or consumption of money, materials, etc. |
| consumer sovereignty | role of consumer as ruler of the market when determining the types of goods and services produced |
| profit | extent to which persons or organizations are better off at the end of a period than they were at the beginning; usually measured in dollars |
| traditional economy | economic system in which the allocation of scarce resources and other economic activity is the result of ritual, habit, or custom |
| inflation | a persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency |
| free enterprise | economy in which competition is allowed to flourish with a minimum of government interference; term used to describe the American economy |
| market economy | economic system in which supply,demand, and the price system help people make decisions and allocate resources; same as free enterprise economy |
| privatization | conversion of state-owned factories and other property to private ownership |
| collectivization | forced common ownership of factors of production; used in the former Soviet Union in agriculture and manufacturing under Stalin |
| capital-intensive industries | production method requiring relatively large amounts of capital relative to labor |
| perestroika | Soviet restructuring to make production more competitive in a market economy |
| state farm | large farms owned and operated by the state in the former Soviet Union |
| Great Leap Forward | Chinese plan to institute pure communism and industrial and agricultural revolution within five years |
| Piecework | workers are paid for each unit produced |
| collateral | property or other security used to guarantee repayment of a loan |
| keiretsu | industry collaborative that prevents harmful competition among Japanese businesses |
| communism | economic and political system in which factors of production are collectively owned and directed by the state; theoretically classless society in which everyone works for the common good |
| transparency | making business dealings more visible to everyone, especially government regulators |
| storming | Soviet practice of rushing production at month's end to fulfill quotas, often resulting in production of shoddy goods |
| infrastructure | the highways, mass transit, communications, power, water, sewerage and other public goods needed to support a population |
| Five-Year Plan | comprehensive centralized economic plan used by the Soviet Union and China to coordinate development of agriculture and industry |
| black market | market in which economic products are sold illegally |
| socialism | economic system in which the government owns some basic productive resources and manages them in the best interests of society |
| Gosplan | central planning authority in former Soviet Union that devised and directed Five-Year plans |
| collective farm | small farms in the former Soviet Union owned by the state, but operated by families who shared in some of the profits |
| Solidarity | independent, sometimes illegal Polish labor union founded in 1980 by Lech Walesa |
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breckart2
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