Economy
Terms
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- Capital goods
- satisfy wants indirectly by aiding production of consumer goods
- needs
- requirements for survival, such as food, clothing, and shelter
- productivity
- a measure of the amount of output produced by a given amount of inputs in a specific period of time
- Labor
- human effort
- marginal benefit
- the additional benefit associated with an action
- The Wealth of Nations
- by Adam Smith
- goods
- tangible products
- opportunity cost
- the cost of the next best use of time and money when choosing to do one thing or another
- competition
- the struggle between buyers and sellers to get the best products at the lowest prices
- Variable Cost
- expenses that change with the number of products produced
- profit motive
- the driving force that encourages to improve their material well being
- trade off
- the alternative you face if you decide to do one thing rather than the other
- Consumer goods
- satisfy wants directly
- factor markets
- a market where productive resources are bought and sold
- market
- a location or other situation that allows buyers and sellers to exchange a certain economic product
- free enterprise
- another term used to describe the American economy
- secondhand sales
- not part of the GDp
- economics
- the study of how individuals and nations make choices about ways to use scarce resources to fulfill their needs and wants
- consumer sovereignty
- consumers rule
- Capital
- tools, machinery, and buildings
- scarcity
- not having enough resources to produce all of the things we would like to have
- services
- work that is performed for someone else
- Cost benefit analysis
- an economic model that compares the marginal costs and benefits of an action.
- capitalism
- an economic system in which private citizens own and use the factors of production in order to seek a profit
- specialization
- things concentrate on goods or services that they can produce better than anyone else.
- factors of production
- resources necessary to produce goods and services
- Fixed Cost
- cost or expenses that are the same no matter how many units of a good are produced
- economic interdependence
- we rely on others and others rely on us
- profit
- money left over after costs of production are paid
- marginal cost
- the additional or extra opportunity cost associated with an action
- wants
- things we would like to have
- final good
- a good sold to its user
- economic models
- simplified representations of the real world used to explain how the economy works or to predict what would happen if something in the economy should change
- laissez faire
- to let alone
- standard of living
- quality of life based on possessions
- product markets
- a market where producers offer goods and services for sale
- voluntary exchange
- the act of buyers and sellers freely engaging in market transactions
- four factors of production
- natural resources, labor, capital, entrepreneurs
- division of labor
- the breaking down of a job into separate, smaller tasks
- Entrepreneurs
- individuals who start new businesses
- gross domestic product
- total dollar value of all final goods and services produced in a country during a single year
- Marginal Revenue
- the additional or extra benefit associated with an action
- Total Cost
- Fixed costs + Variable costs
- private property rights
- we have the freedom to own use or discard our own property
- human capital
- the sum of the skills, abilities, and motivation of people
- natural resources
- resources are what we use to make products