| A | B |
|---|
| Needs | Things that are required in order to live. |
| Wants | Things that add comfort and pleasure to your life. |
| Goods | things that you can see and touch. |
| Services | Activities that are consumed at the same time they are produced. |
| Economic Resources | Are the means through which goods and services are produced, and they are called factors of production. |
| The three kinds of Economic Resources | Natural, Human and Capital. |
| Natural Resources | Raw materials supplied by nature. |
| Human Resources | People producing goods and services. |
| Entrepreneur | A type of human resource person who is the risk taker, who uses resources in an entirely new way to create a new product or service. |
| Capital Resouces | People must have access to tools and equipment in order to convert natural resources into products, and products and money used in the production of goods and services. |
| Scarcity | Not having ecough resources to satisfy every need. |
| Economic decision-making | The process of choosing which wants, among several options, will be satisfied. |
| Tradeoff | When you give up something to have something else |
| Opportunity Cost | The value of the next-best alternative that you did not choose. |
| Decision Making-Process | (1) Define the problem. (2) Identify the choices. (3) Evaluate the advantages and disadvantages of each choice. (4) Choose one. (5) Act on your choice. (6) Review your decision. |
| Economic System | A nation's plan for answering the three economic questions. |
| Command economy | The resources are owned and controlled by the government. |
| Market economy | The resources are owned and controlled by the people of the country. |
| Traditional economy | Goods and services are produced the way it has always been done. |
| Mixed economy | Combines elements of the command and market economies. |
| Capitalism | Refers to the private ownership of resources by individuals, rather than by the government. |
| Right of Private Property | Means you can own, use, or dispose of things of value, as long as you do not violate the law. |
| Freedom of Choice | You can make decisions independently and must accept the consequences of those decisions. |
| Competition | The rivalry among businesses to sell their goods and services. |
| Consumer | A person who buys and uses goods and services. |
| Producers | Are individuals and organizations that determine what products and services will be available for sale. |
| Demand | The quantity of a good or service that consumers are willing and able to buy. |
| Supply | Refers to the quantity of a good or service that businesses are willing and able to provide. |
| Competitors | Are businesses offering very similar produces to the same customer. |
| Market Price | The point where supply and demand are equal. |
