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Civics chapters 18 & 19

Terms

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economics
the study on how we make decisions in a world where resources are limited
capital
tools, machinery, and buildings used to make other products
profit
amount of money left over after all the costs of production have been paid
opportunity cost
the cost of the next best use of your time or money when you chose to do one thing rather then the other
human capital
the sum of the skills, abilities, and motivation of people
entrepreneurs
individuals who start new businesses, introduce new products, and improve management techniques
marginal benefit
the additional or extra benefit associated with an action
consumer sovereighty
describe the consumer as the "king" or ruler of the market, the one who determines what products will be produced
gdp
the total value in dollars of all the final goods and services produced in a country during a single year
natural resources
all of the "gilts of nature" that make production possible
wants
things we would like to have that make life more comfortable and enjoyable
free enterprise
another term used to describe the American economy where competition is allowed to flourish with a minimum of gov. interference
factor markets
markets where productive resources are bought and sold
goods
tangible products that we use to satisfy our wants and needs
division of labor
breaking down of a job into separate, smaller tasks, which are performed by different workers
scarcity
whenever we do not have enough resources to produce all of the things that we would like to have
economic models
simplified representations of the real world that are used to explain how the economy works, or to predict what would happen if something in the economy should change
economic interdependance
relying on others and others relying on us to provide services and goods that we consume
service
work that is performed for someone else
profit motive
driving force that encourages individuals and organizations to improve their material well being and is largely responsible for the growth of a free enterprise system based on capitalism
competition
the struggle b/t buyers and sellers to get the best product aat the lowest price
standard of living
quality of life based on the possession of necessities and luxuries that make life easier
capitalism
an economic system in which private citizens own and use the factors of production in order to speak a profit
needs
things needed to live
factors of production
resources necessary to produce goods and services such as natural resources, labor, capitol, and enterprises
private property rights
we have the freedom to own and use, or dispose of our own property as we choose as long as we do not interfere with the rights of others
labor
the nations labor force or human resources
voluntary exchange
act of buyers and sellers freely engaging in market transactions
productivity
a measure of the amount of output produced by a given amount of inputs in a specific period of time
marginal cost
the extra or additional cost of producing one additional unit of output
specialization
takes place when people, businesses, regions, and countries concentrate on goods and services that they can produce better then anyone else
factors of production
resources necessary to produce goods and services such as natural resources, labor, capitol, and enterprises
cost benefit analysis
requires people to compare the marginal cost and marginal benefits of a decision
trade-off
alternative that you face if you decide to do one thing rather then the other

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