| A | B |
|---|
| Economics | is the study of how we make decisions in a world of limited resources |
| Capitalism | example of an economic system |
| Microeconomics | deals with the economic decisions of individuals |
| Opportunity Cost | the cost of any activity measured in terms of the value of the best alternative that is not chosen |
| Want | something you desire |
| Need | something that is necessary for survival |
| Natural Resources | naturally within environments that exist relatively undisturbed by mankind, in a natural form (example: water) |
| Product Markets | markets where products are bought and sold ( |
| competition | between sellers keeps the cost of production low and quality of goods high |
| Four Factors of Production | natural resources, labor, entrepreneurship and capital |
| Circular Flow of Economic Activity | made up of Four sectors: business, consumer, government, and foreign |
| human capital | increased by training workers |
| Pure Food and Drug Act and Fair Packaging and Labeling Acts | help protect consumer rights |
| Certificate of Deposits or CDs | require investors to lock up their money for a longer period of time than a regular savings account CDs pay a lower rate of interest |
| demand curve | graph that shows the amount of a product that would be bought at all prices in the market |
| substitutes | demand for one moves in the opposite direction as the price of the other |
| equilibrium price | neither a surplus nor a shortage |
| law of demand | quantity demanded and price move in opposite directions |
| law of supply | quantity supplied and price move in the same direction |
| normal good | designer clothes |
| inferior good | sales rack clothes |
| elastic good | apple |
| complementary items | items that go together |
| Factor Product | markets where consumers earn their markets where productive RESOURCES are bought and sold |
| technology | The methods or services used to make goods and services |
