| A | B |
|---|
| market | arrangement which allows buyers and sellers to exchange things |
| household | person or group living in the same place |
| firm | business, organization that uses resources to produce something it then sells |
| profit | the money you make on something |
| incentive | something that encourages people to behave in a certain way |
| competition | the struggle to get the business of consumers |
| scarcity | limited quantities to meet unlimited wants |
| land | all natural resources used to produce goods and services |
| opportunity cost | the most important sacrifice that results from making a decision |
| entrepreneur | person who starts a new business or develops a new idea |
| mixed economy | system that combines the free market with centrally planned |
| one's own personal gain | self-interest |
| laissez faire | generally, the government should not interfere with the market |
| centrally planned economy | the government answers all economic questions |
| economic system | how a society produces and gives out goods and services |
| needs | biological requirements for maintaining life |
| wants | psychological desires which are NOT necessary for life |
| goods | things that are bought and sold |
| services | actions that a person or group does for payment |
| factors of production | land, labor and capital |
