 | Term | Definition |
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capital |
refers to any man-made resource used to produce other goods and services. Capital's primary role in the economy is to improve the productivity of labor as it transforms the natural resources of land into goods and services that satisfy the wants-and-needs of consumers. Capital is one of the four basic productive resources or factors of production (the other three are land, labor, and entrepreneurship). |
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capital goods |
also known as physical capital, are goods used over and over again to produce other goods. Buildings, trucks, tools machinery, and other equipment or items used to produce goods and services are capital goods. |
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human capital |
is the knowledge and skills acquired by a worker through education and experience and used to produce goods and services. |
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entrepreneur |
is a person who assembles the factors of production to create new goods and services. An entrepreneur is a person who assumes the risk to start a business with the idea of making a profit. An entrepreneur brings land, labor, and capital together and organizes production. Entrepreneurship is one of the four basic productive resources, or factors of production (the other three are land, labor, and capital). |
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supply |
is the amount of a good or service that producers are able and willing to supply at various prices |
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demand |
means that a consumer is able and willing to buy and item at a given price. |
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law of supply |
states that as a price of a good or service increases, suppliers usually want to supply more of the item, and vice versa. |
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law of demand |
states that as the price of a good or services decreases the quantity that people want to buy normally increases and vice versa. |
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supply curve |
is a graph showing how many units of a product will be supplied (offered for sale) at different prices. The supply curve slopes upwards from left to right; as you read. |
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demand curve |
is a graph that illustrates the relationship between the quantity demanded and price. A demand curve slopes downward from left to right; as you read. |
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trade offs |
are all the alternatives that we give up whenever we choose one course of action over another. |
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opportunity cost |
(economic cost) is the cost of the loss of the next most desirable good or service that could have been produced with a resource. |
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productivity |
is the efficiency with which goods and services are produced, as measured by the quantity produced per person per hour. |
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cost or cost of production |
is an input into the manufacturing of a product. There are three common inputs in manufacturing: (1) raw materials, (2) direct labor, and (3) factory overhead. |
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resources |
are anything that have become valuable because people have found a use for them |
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technology |
is the application of knowledge to develop tools, materials, techniques, and systems to help people meet and fulfill their needs. Technology is the process used to produce a good or service (a water buffalo and plow versus a mechanized plow). |
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three economic questions |
are (1) what goods and services should be produce; (2) how should these goods and services be produced; (3) who consumes these goods and services? |
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link |
refers to a connection. What's the link between freezing temperatures in Florida and the higher price of orange juice? |
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economic system |
(economy) is the method used by a society to produce and distribute goods and services to meet the needs of (their) people. All society must develop an economic system to answer the basic economic questions. There are four types of economic systems (traditional, command, market, and mixed) that attempt to insure everyones needs in a society; such as food, housing, clothing, health care, education, etc
are met. |
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traditional economy |
is an economic system within which decisions are based on customs, beliefs, religion, habit, etc. |
