| A | B |
|---|
| Command economy | An economic system in which all or many of the means of production and distribution are owned and controlled by the government |
| Communism | A command economic system in which the government controls the economic system and does not allow private ownership of the means of production and distribution |
| Economic system | The organized way in which a country handles its economic decisions and solves its economic problems |
| Market economy | An economic system in which the questions of what, how, and for whom goods will be produced are answered by individuals and businesses in the marketplace |
| Socialism | A modified command economic system in which government owns the basic means of production and allows private ownership of businesses as well |
| Traditional economy | An economic system in which people produce only what they must have in order to exist; all economic decisions are based on habit and tradition |
| Capital goods: Manufactured | or constructed items that are used in the production of goods and services |
| Consumer goods and services | Products produced for personal consumption |
| Consumption | The process or activity of using goods and services; The economic process or activity of using goods and services |
| Demand | The quantity of a good or service that buyers are ready to buy at a given price at a particular time |
| Distribution | The economic process or activity by which income is divided among resource owners and producers |
| Economic goods | Physical objects that are useful, scarce, and transferable and which satisfy economic wants |
| Economic resources | The human and natural resources and capital goods used to produce goods and services |
| Economic services | Productive acts that are useful, scarce, and transferable and which satisfy economic wants |
| Economic want | A desire for something that can only be satisfied by spending money |
| Economics | The study of how to meet unlimited, competing wants with limited resources |
| Elastic demand | A form of demand for products in which changes in price correspond to changes in demand |
| Elasticity | An indication of how changes in price will affect changes in the amounts demanded and supplied |
| Equilibrium | The point at which the quantity supplied is equal to the quantity demanded |
| Excess demand | The situation that exists when demand is greater than supply |
| Excess supply | The situation that exists when supply is greater than demand |
| Exchange | The economic process of trading one good/service for another |
| Factors of production | Productive resources; human and natural resources and capital goods |
| Human resources | People who work to produce goods and services |
| Industrial goods and services | Products purchased by producers for resale, to make other goods and services, and/or to use in business operations |
| Inelastic demand | A form of demand in which changes in price do not affect demand |
| Law of demand | Economic principle which states that the quantity of a good or service that people will buy varies inversely with the price of the good or service |
| Law of supply | principle which states that the quantity of a good or service that will be offered for sale varies in direct relation to its price |
| Law of supply and demand | Economic principle which states that the supply of a good or service will increase when demand is great and decrease when demand is low |
| Natural resources | Items found in nature that are used to produce goods and services |
| Need | Something required or essential that is lacking |
| Noneconomic want | Desires for things that can be obtained without spending money |
| Opportunity cost | The benefit that is lost when you decide to use scarce resources for one purpose rather than for another |
| Price | The amount of money paid for a good, service, or resource |
| Production | The economic process or activity of producing goods and services |
| Scarcity | A condition resulting from the gap between limited resources and unlimited wants for goods and services |
| Supply | The quantity of a good or service that sellers are able and willing to offer for sale at a specified price in a given time period |
| Trade-off | Giving up all or a part of one thing in order to get something else |
| Want | A desire for something that is not required |
