| A | B |
|---|
| Scarcity | Inability to satisfy all wants at the same time because resources are limited. |
| Resources | These are the factors of production that are used to make goods and services. |
| Choice | Selecting an item from a set of possible alternatives. |
| Opportunity Cost | What is given up when a choice is made. |
| Price | The amount of money exchanged for a good or service. |
| Incentives | Things that incite or motivate consumers to buy things. |
| Supply & Demand | Interaction of these two things determines price. |
| Production | The combining of human, natural, captial, and entrepreneurship resources to make goods. |
| Consumption | The act of buying and using goods and services. |
| Entrepreneur | A person who takes a risk in search of profits. |
| Free Markets | Markets are allowed to operate without undue interference from the gov't. |
| Private Property | Individuals and businesses have the right to own personal property without undue interference from the gov't. |
| Profit | Consists of earnings after all expenses have been paid. |
| Competition | Rivalry between producers/sellers which results in better quality goods and services. |
| Consumer Sovereignty | Consumers have the freedom to buy what they want and they determine what goods and services will be produced. |
| Economics | The study of how things are made, bought, sold, and used. |
| Traditional Economy | Economy where decisions are made based on habits and customs. |
| Command Economy | Economy where the decisions are made by the government. |
| Market Economy | Economy where the decisions are made primarily by customers and producers. |
| Mixed Economy | Economy where the gov't has a greater role but doesn't control everything. Most popular economy today. |
| Sole Proprietorship | Business owned by an individual. |
| Partnership | Business owned by 2 or more people. |
| Corporation | Business owned by stockholders. |
