| A | B |
|---|
| good | an item that is economically useful or satisfies an economic want |
| consumer good | a product intended for final use by an individual |
| capital good | a product used to produce another product |
| durable good | a product intended to last three or more years |
| non-durable good | a product intended to last less than three years |
| service | work performed for someone |
| consumer | a person who uses products to satisfy a want or need |
| value | the worth of a product expressed in dollars and cents |
| utility | the capacity of a product to be useful and provide satisfaction |
| scarcity | when society does not have enough resources to produce all the things people want |
| wealth | the sum of the products of a nation |
| market | the location where buyers and sellers exchange economic products |
| factors market | where an individual earns his or her income |
| products market | where an individual spends his or her income |
| economic growth | when a nation's total output of goods and services increases over time |
| trade-offs | a person's alternative choices |
| opportunity cost | the value of the next best alternative use of a person's resources |
| production possibilities frontier | diagram representing various combinations of products a nation can produce when all resources are fully utilized |
| cost-benefit analysis | a way of problem-solving comparing the costs to the benefits of an action |
| sole proprietorship | business owned and run by one person |
| unlimited liability | person is personally and fully responsible for all losses and debts of the business |
| partnership | a business owned by two or more persons |
| general partnership | a partnership where all the owners actively run the business |
| limited partnership | the type of partnership where at least one partner is not active in running the business |
| articles of partnership | another name for the partnership agreement |
| limited liability | one advantage a limited partner enjoys compared to a general partner |
| limited life | one of the weaknesses of the partnership form of business |
| corporation | a type of business entity recognized by law as an entity having the same rights as a natural born person |
| incorporate | to form a corporation |
| charter | the government document approving the formation of a corporation |
| shares of stock | ownership certificates in a corporation |
| stockholders | owners of a corporation |
| shareholders | owners of stock in a corporation |
| dividend | a portion of the earnings of a corporation paid to the owners of the corporation |
| bond | a written promise to repay an amount loaned to you at a later date |
| principal | the amount borrowed |
| interest | the price or cost paid to borrow money from someone |
| double taxation | the major disadvantage to the owners of a corporation when the corporation pays dividends |
| bankruptcy | court-granted permission to an individual or business to stop or delay paying its debts |
| demand | the desire, ability and willingness to buy a product |
| demand schedule | chart listing the various amounts of a product at various prices |
| law of demand | as the price of a product increases, the demand for the product decreases |
| market demand curve | quantities of a product demanded by everyone who is interested in purchasing the product at various prices |
| marginal utility | the extra satisfaction or usefulness someone gets from purchasing one more unit of a product |
| diminishing marginal utility | the more units of a product we buy, the less satisfaction we get from each additonal unit of the product |
| change in quantity demanded | movement along the demand curve resulting from a change in price of a product |
| income effect | change in quantity demanded resulting from a change in price that alters consumers' real income |
| substitution effect | when a consumer purchases a lower priced product instead of a higher priced similar product |
| change in demand | a shift in the demand curve to the right or left |
| substitute | a product that can be used in place of another product |
| complement | the use of one product causes an increase in the use of another product |
| income tax | tax on a person's earnings |
| progressive tax | a tax which is higher on those who have higher incomes |
| regressive tax | a tax which is higher on those who make lower wages |
