| A | B |
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| Basic Economic Problem (scarcity) | The problem which faces individuals, businesses, and governments of satisfying unlimited wants and limited resources |
| Capital Resources (capital) | Tools, equipment, and buildings used in producing goods and services |
| Economic Decision Making | The process of choosing which want, among several wants being considered, will be satisfied |
| Economic Resources (factors of production) | The means through which goods and services are produced |
| Goods | Things you can see and touch |
| Human Resources | People who work to produce goods and services |
| Natural Resources | Raw materials supplied by nature |
| Needs | Things that are necessary for survival, such as food, clothing, and shelter |
| Services | Things that satisfy our wants through the efforts of other people or equipment |
| Wants | Things that are not necessary for survival but that add comfort for pleasure to our lives |
| Business | An establishment or enterprise that supplies goods and services in exchange for some form of payment |
| Capitalism (Free or private enterprise system) | An economic system in which most economic resources are privately owned and decisions about production are largely made by free exchange in the marketplace |
| Custom Based Economy | An economic system in which goods are produced the way they have always been produced |
| Directed or Planned Economy | An economy in which resources are owned and controlled by the government |
| Economic System | A nations plan for making decisions on what and how to produce and how to distribute goods and services |
| Market Economy | An economy in which individuals are free to engage in business transactions with buyers who are able and willing to buy and sellers who supply goods and services from which they earn a profit |
| Marketplace | Any place where buyers and sellers exchange goods and services for some form of money |
| Private Enterprise | The right of the individual to choose whether to own a business, what business to enter, and what to produce with only limited government direction |
| Private Property | The right to own, use or dispose of things of value |
| Profit | Money left from sales after subtracting the cost of operating the business |
| Profit Motive | The desire to work hard and be creative to earn a higher profit |
| Voluntary Exchange | Buyers and sellers make their own economic edcisions to determine what the price will be for goods and services produced and sold |
| Demand | The quantity of a product or service that consumers are willing and able to buy at a particular price |
| Labor (worker) Productivity | The quantity of a good an average worker produces in one hour |
| Public Goods | Things that are needed and provided by a community and are equally accessible to everyone |
| Standard of Living | A measure of how well people in a country live. The quantity and quality of wants and needs that are satisfied |
| Supply | The quantity of a product or service that businesses are willing and able to provide at a particular price |
| Base Year | The year chosen to compare an item, such as price, to the same item in another year |
| Business Cycle | the movement of an economy from one condition to another and back again |
| Deflation | A decrease in the general price level |
| Depression | A phase marked by high unemployment, weak sales of goods and services, and business failures |
| Gross Domestic Product (GDP) | The total value of all final goods and services produced in a country in one year. |
| Inflation | An increase in the general price level |
| GDP per capita | The GDP divided by the total population of a country |
| Prosperity | A phase of the business cycle when most people who want to work are working and businesses produce goods and services in record numbers |
| Recession | A period where demand begins to decrease, businesses lower production of goods and services, unemployment begins to rise, and GDP growth slows for several quarters |
| Recovery | A phase of the business cycle in which unemployment begins to decrease, demand for goods and services increases, and GDP begins to rise again |
