| A | B |
|---|
| Capital | The money, equipment, tools and buildings used by a business to produce goods and services. |
| Capitalism | The basic economic system in the U.S. and most modern industrial nations.also called " the free market system" |
| Central planning | In a command economy such as the communist system, the government plans almost all aspects of the economy. |
| Choice | In economics, selecting the best item or action after examining all the possible alternative actions. |
| Command economy | An economy in which the government makes the decisions about what will be produced, how it will be produced and who will get the products. |
| Communism | An economic and political system in which the government owns the factories, farms, and mines |
| Competition | When sellers try to attract buyers away from other sellers by producing better products at lower prices. |
| Consumer sovereignty | In a free market system, the principle that " the consumer is king." That is, sellers will normally produce what buyers ( consumers ) want, at prices consumers are willing to pay. |
| Consumption | The act of buying and using a product. |
| Demand | In economics, demand refers to the amount of a product or service that will be purchased by buyers at all possible prices. |
| Entrepreneur/entrepreneurship | A person who starts a new business, especially if it involves a new idea or product created by the entrepreneur. |
| Free market system | The basic economic system in the U.S. and most modern industrial nations, it is also called capitalism or the capitalist system. |
| Incentives | Anything that motivates or encourages an individual or business to do something. In a free market system, profit is the incentive that motivates businesses to make better products at lower prices. |
| Market/markets | A market is a place where things are bought and sold. Prices in market can vary up or down over time, depending on supply and demand for various products being offered. |
| Means of production | The factories, farms, and miners of the nation. |
| Mixed economy | An economy that is a mix of the free market system with some government influence. |
| Opportunity cost | In any economic decision, the value of the " next best alternative" choice that was given up. |
| Price | The amount of money exchanged for a good or service. |
| Private property | Anything owned and controlled by an individual or a group of individuals, rather than by the government. |
| Private Sector | The part of the economy that is controlled by individuals or businesses, not the government. |
| Production | The act of turning resources into goods and services that can be offered for sale. |
| Profit | The money earned by a business above its expenses |
| Profit motive | The motivating force or principle that says businesses will normally make decisions based on what will create the largest profit for the company. |
| Public Sector | The part of a nation's economy that is controlled by the government. Example: public schools, roads, police and fire departments.etc. |
| Real property | In property law, the term for land and permanent buildings on the land. |
| Resources | Anything used to produce goods and services. |
| Scarcity | The principle that there is never enough of everything to satisfy the total of what everyone wants. |
| Supply | In economics, supply refers to the amount of a product or service sellers are willing to sell at all possible prices. |
| Traditional economy | An economy where economic decisions are based mainly on whatever was done in the past. |
