| 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 |
| entrepreneur | an individual risk taker in search of profits, and a factor of production |
| labor | the factor of production that includes people, and their efforts, abilities and skills |
| productivity | the measure of the amount of output produced over a specific period of time |
| dividend | payment of a portion of a corporation's earnings to a shareholder |
| charter | government document creating a corporation |
| principal | the amount borrowed excluding interest charges and fees |
| unlimited liability | when a business person is fully responsible for all the debts of his or her business |
| marginal utility | the extra usefulness a person gets from buying one more unit of the same product |
| demand schedule | a chart showing the various quantities demanded of a product at all prices |
| demand curve | a graph showing the quantity demanded of a product at different prices in the market |
| unit elastic | when a given change in price causes a proportional change in the quantity demanded |
| demand elasticity | the measure of how a change in the price of a product causes a change in the quantity demanded of a product |
| Law of Demand | the quantity demanded of a product varies inversely with its price |
| inelastic demand | when a change in the price of a product and the total expenditures on the product move in the same direction |
| elastic demand | when a change in the price of a product and the total expenditures on the product move in the opposite direction |
| total product | all of the output produced by a firm |
| production function | the relationship between output changes and changes in a single input |
| marginal product | the extra output generated by the addition of one more unit of a variable input |
| quantity supplied | the amount of a product provided at a given price |
| variable cost | cost change when the rate of operation or output changes |
| diminishing returns | increasing input with reduced output |
| supply curve | graph showing the amount of a product producers are willing to offer for sale at each price in the market |
| total revenue | number of units sold times the average price per unit |
| total costs | fixed costs plus variable costs |
| traditional economy | economic decisions are based on customs and beliefs |
| market economy | economic decsions are made by individuals |
| command economy | economic decisions are made by government leaders |
| capitalism | the economic system in which the means of production and distribution are privately owned |
| socialism | the economic system in which the means of production and distribution are owned by the government |
| communism | the economic system in which the means of production and distribution are owned by the people |
| marginal utility per dollar | marginal utility divided by the amount spent |
| marginal utility | new total utility minus old total utility |
| shortage | when quantity demanded exceeds quantity supplied |
| minimum wage | lowest amount legally paid to workers |
| equilibrium price | where the supply curve and demand curve of a product intersect |
| surplus | when the quantity supplied exceeds the quantity demanded |
| rebate | partial refund of the purchase price of a product |
