| A | B |
|---|
| economics | the body of knowledge that relates to producing and using goods and services that satisfy human wants |
| economic wants | the desire for scarce material goods and services |
| non-economic wants | desired wants that aren’t scarce |
| utility | the ability of a good or a service to satisfy a want |
| producer | anyone who aids in creating a utility |
| factors of production | four basic natural resources involving land, labor, capital goods, and management |
| natural resources | anything provided by nature that affects the productive ability of a country |
| labor | effort that goes into the production of goods and services |
| human capital | the accumulated knowledge and skills of human beings |
| capital goods | buildings tools, machines, and other equipment used to produce other goods but don’t directly satisfy human wants |
| capital formation | the production of capital goods |
| consumer goods and services | goods and services that directly satisfy people’s economic wants |
| economic system | an organized way for a country to decide how to use its productive resources |
| market economy | goods and services are produced by coordinating individual choices through arrangements that aid by buying and selling goods and services |
| command economy | method for determining what, how, and for whom goods and services are produced is decided by a central planning authority |
| mixed economy | combination of a market and a command economy are blended together |
| privatization | when a country or state transfers its authority to provide a good or service to individuals or businesses |
| capitalism | economic-political system in which private citizens are free to go into business for themselves to produce whatever they choose to produce and to distribute what they produce |
| socialism | economic-political system in which the government controls and regulates the means of production |
| communism | forced socialism where all or almost all the productive resources of a nation are owned by the government |
| private property | consists of items of value that individuals have the right to own, use, and sell |
| profit | the incentive as well as the reward for producing goods and services which is computed by subtracting total costs from total earned receipts |
| demand | refers to the number of products that will be bought at a given time at a given price |
| supply | refers to the number of like products that will be offered for sale at a particular time and at a certain price |
| economic growth | occurs when a country’s output exceeds its population growth |
| Consumer Price Index | a measure of the average change in prices of consumer goods and services typically purchased by people living in urban areas |
| CPI | Consumer Price Index |
| recession | a decline in the GDP that continues for six months or more |
| inflation | the rapid rise in prices caused by inadequate supply of goods and services when demand exceeds supply |
| business cycles | a pattern of irregular but repeated expansion and contraction of the GDP. |
| depression | a long and severe drop in the GDP |
| competition | the rivalry among sellers for consumer's dollars |
