| A | B |
|---|
| scarcity | basic economic problem which involves either not having enough money or not having enough resources |
| economics | the study of the way money, goods, and services are made and used in a society |
| wants | the items we would like to have |
| needs | what we must have in order to live. Needs include: food, water, air clothes, and shelter |
| goods | the items that satisfy our wants. Goods are tangible things we can touch. |
| services | something one person does for another |
| resources | what is used to make goods and provide services |
| 3 types of resources | human resources, natural resources and capital resources |
| human resources | the human effort used to make goods and services. This is often referred to as labor. |
| natural resources | these resources come directly from nature like the land, water, trees, air, and minerals. |
| capital resources | human-made resources used to help produce a good or service. Things like machines and tools are capital resources. |
| scarcity | a shortage or the condition that exists because of limited resources |
| opportunity cost | when making choices, what you give up |
| producer | a person who makes a good or provides a service |
| consumer | someone who uses a good or service |
| interdependence | how people depend on each other for work, goods, and services. |
| income | money received for providing a service. |
| product | the good that a producer makes. |
| production | the making of the good or service |
| specialization | the idea that a worker is skilled in a specific area and performs only that job |
| division of labor | the process wher workers perform only one part or a few parts in the production process |
| productivity | how much can be produced in an amount of time. |
| barter | the direct trading of goods and services without the use of money |
| money characteristics | durable, convenient, scarce, easy to use, accepted |
| durable | it can take the wear and tear of using it often |
| convenient | you can use it without determining what you must trade with another person |
| scarce | it can not be made easily or in great quantity |
| easy to use | it can be divided into the correct amounts needed |
| accepted | it is agreed upon by people using it |
| money | bills or coins used to buy goods and services |
| price | the value of a good or service stated in money terms |
| profit | the difference between the amount of money businesses receive from selling their good or service and the cost of producing that good or service |
| taxes | money that is collected from people and businesses used to pay for government functions and programs |
| sales tax | taxes paid on the goods and services people buy. |
| property tax | taxes paid on the land and buildings you own. |
| income tax | taxes paid on the income you earn |
| excise tax | taxes paid on certain goods like gasoline, alcohol, and tobacco |
| supply | how much producers are willing and able to sell at all possible prices |
| demand | how much consumers are willing and able to buy at all possible prices |
| shortage | a situation that occurs when the amount demanded is greater than the amount supplied |
| surplus | a situation that occurs when the amount supplied is greater than the amount demanded |
| competition | a technique that is used by businesses to gain more customers and to earn higher profits |
