36 terms


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