Economics Vocabulary

Terms in this set (27)

Economic system
a set of ideas that guides how a country will use its resources and produce goods
Barter
to trade or exchange goods & services
Competition
when business sell similar goods and try to attract most consumers and get the most money
Supply
the amount of something that producers want to make or sell for a certain price
Human resources
consist of the talents of human beings that contribute to the production of goods and services
Producer
people who make goods and provide services
Consumer
people who use goods and services
Opportunity Cost
that value of an item or opportunity lost
Natural resources
useful resources supplied by nature
Capital resources
consist of human-made materials needed to produce goods and services
Equilibrium Price
the price at which the quantity of a product offered is equal to the quantity of the product in demand
Scarcity
the condition that exists because humans want to exceed the capacity of available resources to satisfy those wants
Surplus
an amount or quantity, greater than needed
Shortage
occurs when the quantity demanded is higher than the available supply
Interdependence
dependent on others for some needs and vice versa
Lottery
a process or thing whose outcome is determined by chance
Import
items brought into a country
Export
items brought out of a country (exit)
Tariff
a tax or duty to be paid on a particular set of imports or exports
Division of Labor
when a worker or group of workers is assigned a specialized task in order to increase production
Demand
the amount of something that consumers want to buy for a certain price
Goods vs. Services
One is an object people want that they can touch or hold. The other is an action that a person does for someone else.
Labor
physical or mental work--a job or task done
Specialization
when a nation or individual concentrates its productive efforts on producing a limited variety of goods
Comparative Advantage
producing a good when he or she has the lowest opportunity cost to produce that good
Absolute Advantage
produce a good with fewer resources than another person or nation
Factors of production
the elements needed to produce goods and services
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