Economics

the tools, equipment, machinery, and factories used in the production of goods and services

Capital

An economic system in which the government makes all economic decisions

Command Economy

How much people want

Demand

Economies that are rich and have many industries and factories

Developed Economies

Economies that are poorer and trying to become developed

Developing Economies

when a nation's total output of good and services increase over time

Economic Growth

The way goods and services are produced, bought, and sold

Economy

a risk- taking individual in search of profits who does something new with existing resources

Entrepreneurs

the resources required to produce the things we would like to have--these are land, capital, labor, and entrepreneurs.

Factors of Production

Anything that has value that can be touched

Goods

the dollar value of all final goods and services and structures produced within a country's borders in a 12 month period.

Gross Domestic Product

When there is too much money and it becomes worthless

Inflation

people with all of their abilities, efforts, and skills

Labor

"gifts of nature" or natural resources not created by humans

Land

the quantity demanded of a good or service varies inversely with its price

Law of Demand

the principle that suppliers will normally offer more for sale at high prices and less at lower prices

Law of Supply

An economic system in which people choose freely what to buy and sell

Market Economy

Market-based economic system with limited government involvement

Mixed Economy

Any item that can be traded for goods or services

Money

something like air, food, or shelter that is necessary for survival

Need

Resources that cannot be brought back or used again

Non-renewable Resources

the cost of the next best alternative among a person's choices-the time, money, or resources that are given up or sacrificed to make the final choice

Opportunity Cost

How much an item costs

Price

The process of creating goods and services

Production

Resources that can be used again or brought back

Renewable Resources

when there is not enough of something to satisfy how much everyone wants of it.

Scarcity

Job done for money

Services

a situation in which a good or service is unavailable; a temporary situation

Shortage

a measure of how well people live

Standard of living

How much is available

Supply

What goods and services should be produced? How these goods and services should be produced? For whom should these goods and services be produced?

Three Economic Questions

the alternative choices people face in making an economic decision

Trade-offs

An economy in which production is based on customs and traditions and economic roles are typically passed down from one generation to the next

Traditional Economy

things you would like to have but are not necessary for survival

Wants