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Unit 9

STUDY
PLAY
goods
tangible products that we use to satisfy our wants and needs
services
work performed for someone else
factors of production
resources necessary to produce goods and services
natural resources
"gifts of nature" that make production possible
labor
human resources
capital
the manufactured goods used to make other goods and services.
entrepreneur
An individual who starts a new business, introduces new produces, and improve processes
Gross Domestic Product
The total value in dollars of all the final goods and services produced in a country during a single year
market
the free and willing exchange of goods and services between buyers and sellers
factor market
the markets where productive resources are bought and sold
product market
markets where producers offer goods and services for sale.
productivity
A measure of the amount of output produced by a given level of inputs in a specific period of time
specialization
People, businesses, regions, or even countries concentrate on goods and services that they can produce better than anyone else
division of labor
Breaking down a job into small tasks performed by different workers
capitalism
an economic system in which private citizens own and use the factors of production in order to seek a profit
free enterprise
economic system in which individuals and businesses are allowed to compete for profit with a minimum of government interference
consumer sovereignty
Describes the consumer as the "king" or ruler, of the market, the one who determines what products will be produced
private property rights
Citizens have the freedom to own and use, or dispose our own property as we choose as long as we don't interfere with the rights of others.
competition
the struggle between buyers and sellers to get the best products at the lowest prices
profit
the amount of money left over after all the costs of production have been paid
profit motive
the driving force that encourages individuals and organizations to improve their material well-being
voluntary exchange
The act of buyers and sellers freely and willingly engaging in market transactions
demand
The desire, willingness, and ability to buy a good or service.
demand schedule
A table that lists the various quantities of product or service that someone is willing to buy over a range of prices.
demand curve
is a graph that shows the amount of a product that would be bought at all possible prices in the market
law of demand
quantity demanded and price move in opposite directions
market demand
The total demand of all consumers for their product or service
utility
The pleasure, usefulness, or satisfaction we get from using the product
marginal utility
additional satisfaction
substitutes
Competing products
complements
Used together
demand elasticity
the extent to which a change in price causes a change in the quantity demanded
supply
Various quantities of a good or service that producers are willing to sell at all possible market prices
law of supply
The principle that suppliers will normally offer more for sale at higher prices and less at lower prices
supply schedule
A numerical chart that illustrates the law of supply
supply curve
A graph that shows the amount of a product that would be supplied at all possible prices int he market.
market supply
Total of supply schedules of all the businesses that provide the same good or service
technology
The methods, or processes, used to make goods and services.
supply elasticity
A measure of how the quantity supplied of a good or service changes in response to changes in price
surplus
The amount by which the quantity supplied is higher than the quantity demanded
shortage
The amount by which the quantity demanded is higher than the quantity supplied
equilibrium price
The point when supply and demand are balanced
price ceiling
the maximum price set by the government that can be charged for goods and services.
price floor
a government minimum price that can be charged for goods and services.
minimum wage
the lowest legal wage that can be paid to most workers