| A | B |
|---|
| economics | body of knowledge that relates to producing and using goods and services that satisfy human wants |
| economic wants | the desire for scarce material goods and services |
| noneconomic wants | desires for nonmaterial things that are not scarce, such as friendship, sunshine, and happiness |
| utility | ability of a good or a service to satisfy a want |
| form utility | created in the form or shape of a product to make it useful |
| place utlity | created by having a good or service at the place where it is needed or wanted |
| time utility | created when a product or service is available when it is needed or wanted |
| possession utility | created when ownership of a good or service is transferred from one person to another, but may also occur through renting and borrowing |
| factors of production | land (natural resources), labour, capital goods, and entrepreneurship |
| natural resources | anything provided by nature that affects the productive ability of a country |
| labour | human effort, either physical or mental, that goes into the production of goods and services |
| human capital | the accumulated knowledge and skills of human beings |
| capital goods | buildings, tools, machines, and other equipment that are used to produce other goods but do not directly satisfy human wants |
| capital formation | the production of capital goods |
| consumer goods and services | goods and services that directly satisfy people's economic wants |
| economic system | organised way for a country to decide how to use its productive resources |
| market economy | economic system in which individual buying decisions in the marketplace determine what, how and for whom goods and services will be produced |
| command economy | economic system in which a central planning authority, under the control of the country's government, owns most of the factors of production and determines what, how, and for whom goods and services will be produced |
| mixed economy | economic system that uses aspects of a market and command economy to make decisions about goods, national government makes production decisions for certain goods and services |
| privataion | transfer of authority to provide a good or service from a government to individuals or privately owned businesses |
| capitalism | free-enterprise system which operates in a democracy, economic-political system in which private citizens are free to go into business for themselves, to produce whatever the choose to produce, and to distribute what they produce |
| socialism | economic-political system in which the government controls the use of the country's factors of production |
| communism | extreme socialism, in which all or almost all of a nation's factors of production are owned by the government |
| private property | consists of items of value that individuals have the right to own, use and sell |
| profit | the reward for producing goods and services, computed by subtracting the total costs of producing the products from the total received from customers who buy them |
| demand | refers to the number of products that will be bought at a given time at a given price |
| supply | refers to the number of like products that will be offered for sale at a particular time |
| competition | the rivalry among sellers for consumers' dollars |
| income distribution | how a nations GDP is distributed amongst the population |
| economic growth | occurs when a country's output exceeds its population growth |
| consumer price index (CPI) | indicates what is happening in general to prices in the country |
| index of leading economic indicators | measures the economy's strength for the next six to nine months using a variety of forward looking indicators |
| employment | the measure of the jobless rate and the number of jobs available |
| retail sales | measures consumer spending |
| personal income consumption | measures growth in personal income and consumer spending |
| recession | decline in the GDP that continues for six months or more |
| inflation | rapid rise in prices caused by an inadequate supply of goods and services |
| business cycles | pattern of irregular but repeated expansion and contraction of the GDP |
| expansion | modest rise in GDP, profits and employment |
| peak | growth reaches its highest level as do profit and employment |
| contraction | growth begins to decline, as does employment |
| trough | lowest point in the cycle, with increased unemployment |
| depression | a long and severe drop in the GDP |
