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| economics | the study of how society chooses to use scarce resources to satisfy its unlimited wants and needs. |
| economist | a person who studies the economic theory and applies it to the real world. |
| microeconomics | the study of a single factor of an economy such as individuals, households, businesses, and industries rather than an economy as a whole. |
| macroeconomics | the study of an entire economy or one of its principle sectors. |
| consumers | one who buys goods or services for personal use rather than for resale or use in production or manufacturing. |
| producers | a person, group, or business that makes goods or provides services to satisfy consumers’ needs and wants. |
| goods | any object or material that can be purchased to satisfy human wants or needs. |
| services | any action or activity that is performed for a fee. |
| resource | anything used to produce goods or services. |
| factor of production | a resource used to produce goods and services |
| natural resource | in economics, any material provided by nature that can be used to produce goods or provide services. |
| human resource | any human activity mental or physical used in the production process. |
| capital resource | any item that is used in the production of other goods and services. |
| capital goods | the buildings, structures, machinery, or tool that is used to produce goods or services. |
| consumer goods | a finished product that is consumed by an individual. |
| technology | scientific and technical techniques used to produce existing products more efficiently or of higher quality. |
| entrepreneurship | the organizational abilities and risk taking involved in starting a new business or intro a new product to producers. |
| entrepreneur | a person who attempts to start a new business or intro a new product. |
| scarcity | the fundamental condition of economics that results from the combination of limited resources and unlimited wants. |
| allocate | distribute scarce resources such as money, land, equipments, or labor in order to satisfy the greatest number of needs and wants. |
| productivity | the level of output that results from a given level of input. |
| efficiency | the production of goods and services using the smallest amount of resources for the greatest common outpost. |
| division of labor | the division of a complex procedure into small tasks, enabling workers to increase output through specialization. |
| specialization | the focus of workers on only one or a few aspects of production in order to improve efficiency. |
| trade-off | sacrifice of one good in order to purchase or produce another. |
| opportunity cost | the value lost by rejecting one use of resources in favor of another. In other words, an action’s opportunity cost is the value of the next best alternative action that is not taken. |
| production possibilities curve | a graph showing all combinations of two goods or services that can be produced given two important assumptions. First, the amount of resources and technology will not change. Second, all of the natural, human, and capital resources are being used efficiently. |
| exchange | the process by which producers and consumers agree to provide one type of item in return for another. |
| barter | the direct trade exchange of goods and services without the use of money. |
| money | any item that is accepted in exchange for goods, services, or the settling of debts. |
| credit | a form of exchange that allows consumers to use items with a promise of repayment over a specified time. |
| value | the worth of a good or service for the purchase of exchange, AKA the amount of money that a consumer is willing to pay for a good or service. |
| self-sufficiency | the ability to fulfill all of one’s needs without assistance. |
| utility | the usefulness of a good or service that contributes to its value. |
| interdependence | the relationship of mutual reliance and influence among people, businesses, industries, regions, and nations. |
