Civics Today Ch.18-19
Terms
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- private property rights
- the freedom to own and use our own property as we choose as long as we do not interfere with the rights of others
- factor markets
- a market where productive resources are bought and sold
- standard of living
- the material well-being of an individual, group, or nation measured by how well their necessities and luxuries are satisfied
- trade-off
- the alternative you face if you decide to do one thing rather than another
- division of labor
- the breaking down of a job into separate, smaller tasks to be performed individually
- capitalism
- a system in which private citizens own most, if not all, of the means of production
- incentives
- rewards offered to try to persuade people to take certain economic actions
- consumer sovereignty
- the role of consumer as the ruler of the market, determining what products will be produced
- human capital
- the sum of skills, abilities, and motivation of people
- services
- work that is performed for someone else
- opportunity cost
- the cost of the next best use of your time or money when you choose to do one thing rather than another
- goods
- tangible products like books and automobiles that we use to satisfy our wants and needs
- economic interdependence
- a reliance on others, as they rely on you, to provide goods and services to be consumed
- Adam Smith
- Scottish economist and philosopher who wrote The Wealth of Nations
- wants
- things that were would like to have
- economic models
- simplified representation of the real world that economists develop to describe how the economy behaves and is expected to perform in the future
- natural resources, labor, capital, and entrepreneurs
- Name the four factors of production
- specialization
- when people, businesses, regions, and/or nations concentrate on goods and services that they can produce better than anyone else
- rational choice
- choosing the alternative that has the greatest value from among comparable-quality products
- free enterprise
- economic system in which individuals and businesses are allowed to compete for profit with a minimum of government interference
- natural resources
- gifts of nature that make production possible
- entrepreneur
- an individual who starts new businesses, introduce new products, and improve management techniques
- Gross Domestic Product (GDP)
- total dollar value of all final goods and services produced in a country during a single year
- capitalism
- a system in which private citizens own most, if not all, of the means of production and decide how to use them within legislated limits
- free enterprise
- economic system in which individuals and businesses are allowed to compete for profit with a minimum of government interference
- marginal benefit
- the additional or extra benefit associated with an action
- product markets
- markets where producers offer goods and services for sale
- productivity
- the degree to which resources are being used efficiently to produce goods and services
- labor
- human effort directed toward producing goods and services
- scarcity
- not having enough resources to produce all of the things we would like to have
- competition
- the struggle that goes on between buyers and sellers to get the best products at the lowest prices
- marginal cost
- the extra, or additional, cost of producing one additional unit of output
- profit motive
- the driving force that encourages individuals and organizations to improve their material well-being
- voluntary exchange
- the act of buyers and sellers freely and willingly engaging in market transactions
- market economy
- an economic system in which supply, demand, and prices help people make decisions and allocate resources
- factors of production
- resources necessary to produce goods and services
- needs
- things that are required for survival
- cost-benefit analysis
- economic model that compares the marginal costs and marginal benefits of a decision
- profit
- the money a business receives for its products or services over and above its costs
- economics
- the study of how we make decisions in a world where resources are limited
- capital
- previously manufactured goods used to make other goods and services