Is the study of how people produce, distribute, and consume things to meet their basic needs.
The amount of goods and services that producers make.
The amount of items or services that consumers are willing to buy.
Desired Items. Ex. Nintendo, toys and games.
The act of making or providing goods and services.
Items necessary for survival. Ex. Food, water and air.
Free Market Economy
The answers to economic questions come from the producers and consumers. People are given the opportunity to make their own choices. The U.S. is a free market economy.
People or businesses that use goods and/or services to satisfy their needs and wants. Ex: A consumer uses food by eating it and clothes by wearing them.
The difference between the producer's cost and the seller's price. Ex: If it costs $7 to make a shirt and the shirt sells for $23, then the profit is $16.
Answers to economic questions are in the hands of the government. The government tells people what to do, how to make things, and how much to make.
Traditional Economic System
Answers to economic questions are based on customs. People do what their parents did. Example: a farmer's son becomes a farmer while a shoemaker's son becomes a shoemaker.
A person or business that supplies goods and/or services.
Any item that people make or use. Example: toys, food, cars.
Things that people do for others. Doctors, firefighters, and teachers all perform a service.
People who study economics.
The inability of resources to meet our unlimited wants. When there is not enough of something.
The cost of giving up things when we make an economic decision.