| Barter |
The direct trading of goods and services between people without the use of money. |
| Capital Resources (capital goods) |
Goods made by people and used to produce other goods and services (machines and factories). |
| Choice |
Deciding between two or more possible alternative objects or actions; called an economic choice for decisions among goods, services, or resources. |
| Circular Flow |
A model of an economy showing the interactions between households and business firms as they exchange goods and services and resources in markets. |
| Competition |
Rivalry among sellers to sell (supply) goods and services, or among buyers to buy (acquire) a service or good. |
| Consumers |
People whose wants are satisfied by using goods and services/using goods and services. |
| Cost of Production |
The total paid for all resources used by a business in producing goods and services. The owners of the resources receive the payment. |
| Credit |
The purchase of something using a promise to pay in the future. |
| Demand |
A schedule of how much consumers are willing and able to buy at each possible price during some time period. |
| Division of Labor |
The process whereby workers divide up a job, so each performs only a single task or very few steps of a major production task, as when working on an assembly line. |
| Economic Systems |
Way in which a society decides and organizes production, distribution and consumption of goods and services of an economy, usually described as traditional, market, command, and mixed economies. |
| Entrepreneurs |
The human resource (person) who assumes the risk of organizing the other productive resources to produce goods and services. |
| Equilibrium Price |
The market clearing price at which the quantity demanded by buyers equals the quantity supplied by sellers. |
| Factors of Production |
The resources used to produce goods and services, which are labor, capital (machines and buildings), and land. |
| Goods |
Objects that can satisfy people's wants. |
| Human Resources (labor) |
The quantity and quality of human effort directed toward producing goods and services (also called labor). |
| Incentives |
Things that motivate and influence the behavior of households and businesses. Prices, profits, and losses act as incentives for participants to take action in a market economy. |
| Income Tax |
Taxes paid by households and business firms based on the amount of income they receive. |
| Inflation |
A persistent rise in overall prices. |
| Interdependence |
People depend on each other to provide goods and services; occurs as a result of specialization of production. |
| Investment in Capital Resources |
Business purchases of new plants (buildings) and equipment. |
| Investment in Human Resources |
Activities that increase the skills and knowledge of workers. |
| Market Economy |
An economic system where most goods and services are exchanged through private transactions by private households and businesses. Prices are determined by buyers and sellers making exchanges in private markets. |
| Markets |
Any setting where buyers and sellers exchange goods, services, resources, and currencies. |
| Money |
A medium of exchange, which is a good (like shells or metal coins or pieces of paper) that can be used to buy other goods and services. |
| Natural Resources |
Gifts of nature that can be used to create goods or services, and are present without human intervention. Land is the main natural resource. |
| Opportunity Cost |
The next best alternative that must be given up when a choice is made. Not all alternatives, just the next best choice. |
| Prices |
The value of a good or service stated in money terms. |
| Private Property/Property Rights |
Land and other belongings legally owned by a person or group which can be kept for their exclusive use. |
| Producers/Production |
People who use resources to make goods and services, also called workers./ The making of goods and services using resources. |
| Productivity |
The ratio of output (goods and/or services) to input, or the amount of output produced per unit of productive resources over a period of time |
| Profit |
The difference between the total revenue and total cost of producing and selling a good or service in a business; entrepreneurial income. |
| Property Tax |
Taxes paid by households and businesses based on the value of land and buildings. |
| Public Goods |
Goods and services that are provided by the government. They are often goods that individuals don't buy enough of, but provide everyone benefits if widely consumed, such as education or national defense. |
| Resources |
Anything used to produce goods and services; all natural, human and human-made aids to the production of goods and services, also called productive resources. |
| Sales Tax |
Taxes paid on the value of goods and services people buy. |
| Scarcity |
Resources are limited, so people cannot have all the goods and services they want. |
| Services |
Activities that can satisfy people's wants. |
| Shortage |
The situation resulting when the quantity demanded exceeds the quantity supplied at the current price of a good, service, or resource. |
| Specialization |
Production can often be best done by several or many people where each person specializes: does only a part of the job—the part that the person is skilled to do. |
| Supply |
A schedule of how much producers are willing and able to produce and sell at each possible price during some time period. |
| Surplus |
The situation resulting when the quantity supplied exceeds the quantity demanded at the current price of a good, service, or resource. |
| Taxes |
Required payments of money made to governments by households and business firms. |
| Trade-offs |
Giving up one thing or activity to get some of another. |
| Trade/Exchange |
Trading goods/services with people for other goods/services or for money. When people exchange voluntarily, they expect to be better off as a result. |
| Unemployment |
The situation in which people are willing and able to work at current wages but cannot find jobs. |
