| A | B |
|---|
| Factors of Production | Land (Natural resources), labor, capital, and entrepreneurship |
| Land | Natural resources |
| Labor | Human work used in the production of a good or service |
| Capital | Buildings, tools, machinery used in production of a good or service |
| Entrepreneurship | Risk taking and management used in production of a good or service |
| Productivity | The measure of goods and services made with a set amount of resources of a given period of time. |
| Renewable natural resource | A resourse that can be replenished with time. Ex:trees |
| Nonrenewable naturl resource | A resource that once used is forever gone. Ex: oil |
| Scarcity | The universal condition of individuals wanting more goods and service than they can produce or obtain, given the fact of limited resources |
| Need | Items such as food, clothing, and shelter necessary for survival. |
| Want | Things we would like to have; items that make life comfortable and enjoyable |
| Decision making model | Define the problem, list alternatives, state the criteria, evaluate the alternatives, make a decision |
| Consumer | The purchaser or user of final goods and services |
| Producer | A manufacturere or supplier of goods and services |
| Goods | Tangible products that we use to satisfy our wants and needs |
| Services | Work performed by a person for someone else |
| Wages | The price of labor paid per hour |
| Salary | The price of labor paid monthly or yearly |
| Pricing | Pricing is based on the interaction of supply and demand |
| Tradeoffs | The alternative you face if you decide to do one thing rather than another. |
| Opportunity Costs | What a person gives up when an economic choice is made. The cost of the next best use of one's time or money. |
| Immediate gratification | Considering only short-term satisfaction when making a choice. |
| Fixed costs | Business costs that remian the same as productivity changes |
| Variable Costs | Business costs that change as productivity changes. |
| Total costs | Sum of fixed costs and variable costs to businesses |
| Marginal costs | Economic cost of producing the next unit of a good or service |
| Specialization | To focus effort: Ex: Electrician, pediatrician. To concentrate on goods and services that one can produce better than others. |
| Innovation | An improvement on an existing product or process |
| Invention | The creation of a product or process. Patents often protect invetions. |
| Division of Labor | The breaking down of a job into separtate, smaller tasks to be preformed individually. |
| Human Capital | Investment in eduation and training to improve qualtiy of labor |
| White Collar | People who typically work for management in offices |
| Blue Collar | People who do jobs that involve manual labor. |
| Skilled workers | People with special training in a particular occuption, craft, or trade |
| Unskilled workers | A person who lacks training to prefrom a particular job type |
| Automation | Use of machinery instead of people who preform work. |
| Mechanization | The use of machines to do the work of people; a form of automation |
| Technologies | Use of science, industry, and engineering to advance material culture |
| Robotics | Advanced automation often used in the automobile industry |
| Mass production | The production of goods in large quantities, usually by means of machinery and frequently by reliance upton interchangeable parts and division of labor |
| Assembly line | Method of mass prodcution in which product moves from work station to work station |
| Factory | Buliding using mass production techniques to make goods |
| Agribusinesses | Large-scale farming and sale of farm inputs(seeds and fertilizer) |
| Business Organizations | Sole proprietorships, partnerships, cooperatives, corporations |
| Consumption | The use of resources |
| Capital goods | Products used in futher production, such as machinery and raw materials |
| Consumer good | Goods to supple people's needs and wants |
| Output versus Input | The reationship between goods and services produced and factors invested |
| Law of Diminishing Returns | At some point increasing one factor of production only will decrease productivity |
| Recycling | Responsible reuse of resources to reduce landfill waste and protect environment |
| Education and Training | Means to improve human capital or skill level of a workplace |
| Economic Systems | Methods to manage decision making of What, How, and For Whom to produce |
| Traditional Society | Economy in which encomic decisions repeat the decisions made in the past |
| Command Economy | Economy that is organized and operated by the governmemt |
| Market Economy | Economy that runs on the free enterprise system. Consumers make the decision of What, How, and For Whom to produce. |
| Mixed Economy | Economy that uses both free market and command elements |
| Free Enterprise | Freedom of indiviuals or organize and operate businesses for profit with miminal government regulation |
| Consumer Sovereighty | The concept that consumers determine what is produced through their purchases |
| Incentives | Rewards that are offered to try to persuade people to take certain economic actions |
| Exchange | Interaction between producers and consumers |
| Capitalism | Economic system based on private ownership of property and the factors of production. Characteristics include markets, consuemer sovereighty, economic freedom, private property competition and self interest, profit motive, and voluntary exchange. |
| Adam Smith | Called the "father of capitalism": his book influenced the American economic system |
| Competition | Rivalry among sellers of similar goods or services to attract someone |
| Invisible Hand | Smith's idea that the self-interest of capitalism would benefit producers/consumers |
| Wealth of Nations | Book written by Adam Smith in 1776 describing the principles of capitalism |
| Laissez-faire | An economic policy based upon no intervention by the government in economy |
| Keynesian Theory | Economic view that government involvement is necessary to promote exonomic growth and stablitiy. Government spending is an important ecomomic stablizer. |
| Fiscal Policy | Goverment spending and taxation used to stablize the economy |
| Deficit spending | Government spending or borrowing money to combat recession and balance economy |
| Socialism | A type of command economy in which government controls essential industries under communisim, private property is elimited |
| Communist Manifesto | Book written by Karl Marx which established the principles of communism |
| Karl Marx | Author of Communist Manifesto; his book advocated the elimination of private property. |
