| A | B |
|---|
| consumption goods and services | bought by individuals to provide enjoyment and enhance quality of life |
| capital goods | bought by businesses to resources and by governments to improve infrastructure |
| factors of production | resources used to produce goods and services such as land, labor, capital, and entrepreneurship |
| land | natural resources to produce goods and services |
| labor | work time and work effort people devote to producing goods and services |
| human capital | knowledge and skill people obtain from education, on-the-job training, and work experience |
| entrepreneurship | human resource that organizes labor, land, and capital |
| rent | income paid for use of land |
| wages | income paid for services of labor |
| interest | income paid for use of capital |
| profit (or loss) | income earned by entrepreneur for running business |
| functional distribution of income | distribution of income among factors of production |
| personal distribution of income | distribution of income among households |
| circular flow model | model showing circular flow of expenditures and incomes and the way those choices interact to determine what, how, for whom goods and services are produced |
| households | individuals or groups of people living together |
| firms | institutions organizing production of goods and services |
| market | arrangement bringing buyers and sellers together, enabling them to getinformation and do business |
| goods markets | markets in which goods and services are bought and sold |
| factor markets | markets in which factors of production are bought and sold |
