| A | B |
|---|
| consumer | any person or group that buys or uses goods and services to satisfy personal needs and wants. |
| disposable income | income remaining for a person to spend or save after all taxes have been paid. |
| discretionary income | money income a person has left to spend on extras after necessities have been bought. |
| rational choice | choosing the alternative that has the greatest value from among comparable-quality products. |
| competitive advertising | advertising that attempts to persuade consumers that a product is different from and superior to any other. |
| informative advertising | advertising that benefits consumers by giving information about a product. |
| ethical behavior | acting in accordance with moral and ethical convictions about right and wrong. |
| comparison shopping | getting information on the types and prices of products available from different stores and companies. |
| warranty | promise made by a manufacturer or a seller to repair or replace a product within a certain time period if it is found to be faulty. |
| brand name | word, picture, or logo on a product that helps consumers distinguish it from similar products. |
| generic brand | general name for a product rather than a specific brand name given by the manufacturer. |
| consumerism | movement to educate buyers about the purchases they make and to demand better and safer products from manufactures. |
| bait and switch | ad that attracts consumers with a low-priced product, then tries to sell them a higher-priced product. |
| capital | previously manufactured goods used to make other goods and services. |
| capitalism | economic system in which private individuals own the factors of production. |
| command economy | system in which the government controls the factors of production and makes all decisions about their use. |
| competition | rivalry amoung producers or sellers of similar goods and services to win more business. |
| economic efficiency | wise use of available resources so that costs do not exceed benefits. |
| economic equity | the attempt to balance an economic policy so that everyone benefits fairly. |
| economic growth | expansion of the economy to produce more goods, jobs, and wealth. |
| economic model | a theory or simplified representation that helps explain and predict economic behavior in the real world. |
| economics | the study of how individuals and societies make choices about ways to use scarce resources to fulfill their wants. |
| economic system | way in which a nation uses its resources to satisfy its people's needs and wants. |
| economy | the production and distribution of goods and services in a society |
| entrepreneur | person who organizes, manages, and assumes the risks of a business in order to gain profits. |
| entrepreneurship | ability of risk-taking individuals to develop new products an start new businesses in order to make profits. |
| factors of production | resources of land, labor, capital, and entrepreneurship used to produce goods and services. |
| goods | tangible objects that can satisfy people's wants or needs. |
| hypothesis | an assumption involving two or more variables that must be tested for validity |
| labor | human effort directed toward producing goods and services. |
| laissez-faire | economic system in which the government minimizes its interference with the economy, leave alone. |
| land | natural resources and surface land and water |
| market | freely chosen activity between buyers an sellers of goods and services. |
| market economy | system in which individuals own the factors of production and make decisions through free interaction, while looking out for their best interests. |
| microeconomics | branch of economic theory that deals with behavior and decision making by small units such as individuals. |
| macroeconomics | branch of economic theory dealing with the economy as a whole and decision making by large units such as governments. |
| mixed economy | system combining characteristics of more than one type of economy. |
| opportunity cost | value of the next best alternative given up for the alternative that was chosen. |
| private property | whatever is owned by individuals rather than by government |
| production possibilities curve | graph showing the maximal combinations of goods and services that can be produced from a fixed amount of resources. |
| productivity | the amount of output that results from a given level of inputs. |
| profit | money left after all the costs of production--wages, rents, interest, and taxes--have been paid. |
| profit incentive | desire to make money that motivates people to produce and sell goods and services. |
| scarcity | condition of not being able to have all of the goods and services one wants. |
| services | actions that can satisfy people's wants or needs. |
| 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 | sacrificing one good or service to purchase or produce another. |
| traditional economy | system in which economic decisions are based on customs and beliefs that have been handed down from generation to generation. |
