| A | B |
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| Economics | The study of how to meet unlimited wants and needs of a society with its limited resources. |
| Resources | include all things used in producing goods and services. |
| Scarcity | A condition in which more goods and services are desired than are available. |
| Goods | Tangible items |
| Services | intangible. Ex: Going to a baseball game. |
| Entrepreneurship | Incorporates the skills of people who are willing to take the risk of starting their own business |
| Utility | Refers to the added value or usefulness of a product. |
| Form utility | The value added by changing raw materials or putting parts together to make them more useful. For example, wood for a baseball bat. |
| Place Utility | The value added by having a product where customers can buy it. For example, selling movie tickets at the movie theatre. |
| Time Utility | The value added by having a product at a certain time of year or a convenient time of day. For example, selling lemonade at the Verizon Amphitheatre for a concert in the summer. |
| Possession utility | The value added by exchanging a product for some monetary value. For example, a consumer pays $25 for a t-shirt at a concert. |
| Information Utility | The value added by communicating with the consumer. For example, visiting the Meymandi Concert Hall website to find out information about upcoming events. |
| Market Economy | little government involvement in answering the three basic economic questions. Consumers decide what should be produced. Businesses decide how products will be produced. The people who have the money to purchase products determine who will receive them. |
| Command Economy | The government answers the three basic economic questions. The government officials or leaders decide what should be produced. The government runs the businesses and employs the workers. The government also decides who will receive products. |
| Traditional Economy | The system is based on the ways things have always been done. For example, the Amish community and Indian Reservations. |
| Mixed economies | This type of economy is not pure market systems, nor are they completely controlled by the government. They are a mix, or blend, of the two. |
| Capitalism | The people elect the government officials who represent their constituents’ interests. For example, the United States and Japan. |
| Socialism | The government tries to reduce the differences between the rich and the poor. For example, France, Germany, and Great Britain. |
| Communism | Government that is run by one political party and that party controls everything. People are assigned jobs. Students are told what type of schooling they will receive. For example, Cuba and North Korea. |
| Supply | The amount of goods producers are willing and able to produce and sell at a given price during a certain period of time. |
| Demand | A consumer’s willingness and ability to buy products at a given price during a certain period of time. |
| The Law of Supply and Demand | An economic principle that states the supply of a good or service will increase when demand is great and decrease when demand is low. |
| Elasticity | The degree to which demand for a product is affected by its price. |
| Elastic Demand | Refers to how changes in the price of a product affect demand for that product. |
| Inelastic Demand | Refers to a condition in the market where changes in the price of a product have very little affect on the demand for that product. |
| The Business Cycle | The movement of an economy through four recurring phases – prosperity, recession, depression, and recovery. |
| Copmetion | A rivalry between two or more businesses to gain as much of the total market sales or customer acceptance as possible. |
| Direct Competition | Involves two or more companies that utilize the same type of business format. |
| Indirect Competition | Between two or more retailers that employ different types of business formats to sell the same type of goods. |
| Price Competition | Focuses on the selling price of a product. |
| Non-price competition | Based on factors that are not related to price including the quality of products, customer services, business location, business reputation, and the qualifications of the salespeople. |
| Monppolies | These exist when one company has exclusive control over a product or the means of producing it. |
| Profit | The money earned from conducting business after all costs and expenses have been paid. |
| Loss | A decrease in a potential profit. |
| Free Enterprise System | Encourages individuals to start and operate their own business with limited government involvement and allows the market to determine prices through supply and demand. |
| Sole Proprietorship | A business owned and operated by one person. Seventy percent of all businesses in the United States are these. |
| Partnership | A business owned and operated by two or more people. Less than 10% of all businesses in the United States are these |
| Corporation | A business owned by stockholders. |
| Franchise | A business or organization with the right to use an established name and sell trademarked products. These are granted to a retailer or a wholesaler for a fee. |
| General partnership | An agreement in which both partners agree to share equally in the profit and/or loss of the business. Each partner is liable for all debts incurred by the business. |
| Limited partnershi | Each partner is liable for any debts of the business up to the amount of his/her investment. These must have at least one partner who has unlimited liability. |
| Private corporation | Do not offer shares of stock for sale to the general public. |
| Public Cerporations | Offer shares of stock for sale to the general public. |
| Subchapter "S" corporations | This type of corporations are taxed like a sole proprietorship and limited to 35 or less shareholders. |
