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The study of choices that people make to satisfy their needs and wants.


deals with entire economy

Natural Resources

items provided by nature that can be used to produce goods and provide services

Human Resources

any human effort exerted during production is considered a human resource

Capital Resources

the manufactured materials used to create products


person who attempts to start a new business or introduce a new product, risking economic failure in return for the possibility of financial gain


combination of limited resources and unlimited wants


process in which producers and consumers agree to provide one type of it in return for another


products are traded directly for other products


anything that everyone is willing to accept in exchange for goods


in order to avoid the problems of barter, goods and services are assigned this; can be expressed as an amount of money, or a price


when people/society can fulfill all of their needa without outside assistance.


events or developments in one region of the world or sector of the economy influence events/developments in other regions/sectors

Command Economy

relies on government officials to answer the 3 economic questions

Market Economy

individuals answer the 3 basic economic questions; gov. has no say in what, how, for whom goods are produces, & the factors of production are owned by individuals.


something that encourages you to behave in a particular way


mixed economies that are closest to the pure command model; also known as authoritarian socialism


individuals own the factors of production & answer eco. Questions.

Private Property

goods that are owned by individuals and by businesses rather than by government


agreements to buy and sell goods and services

Product Market

represents all of the exchanges of goods and services in the economy

Economic Efficiency

goal has to do with efforts to make the best use of scarce resources

Economic Security

goal refers to a nation's effort to protects its members from situations that that would harm the economic well-being of individual citizens and the nation as a whole

Traditional Economy

based on custom and tradition


the impulse that encourages people to fulfill their needs and wants

Mixed Economy

combines the elements of traditional, market, and command economic models to answer 3 basic economic questions.

Authoritarian Socialism

mixed economies that are closest to the pure command model; communism

Democratic Socialism

type of mixed economy in which the government owns some of the factors of production


the economic rivalry that exists among businesses selling the same or similar products

Price Stability

this is achieved when the overall price level of goods and services available in the economy is relatively constant

Standard of Living

refers to people's economic well-being.

3 Economic Questions

What to produce? How to produce it? For whom to produce?


level of output that results from a given level of input


more of one thing necessarily means less of something else; one good is sacrificed for another

Opportunity Cost

what you have to give up to get what you wanted. The most highly valued opportunity or alternative forfeited when a choice is made.


allows consumers to use items before completing payment for merchandise

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