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Principles of Business and Finance fall 2010 student.

Mixed economy

Combines elements of the command and market economies

Entrepreneurial resources

The initiative to combine natural, human, and capital resources

Opportunity cost

Value of the next-best alternative that is forgone to produce or obtain another product


Businesses that offer the same goods to the same customers


Individuals and organizations that determine which goods and services will be available for consumption

Economic decision-making

Process of choosing which needs or wants will be satisfied

Economic resources

Means from which goods and services are produced

Private property

Right to purchase, use, and discard of things of value


Activities that can be consumed at the time of purchase to satisfy needs and wants


Condition that exists when wants or needs exceed resources available


Study of the decisions made for production, distribution, and consumption of goods and services to satisfy needs and wants


Necessities required for living


Buys and uses the goods and services

Capital resources

Goods and money used in the production of goods and services

Natural resources

Raw materials supplied by nature

Human resources

People using efforts, knowledge, and skills at work to produce goods and services

Free enterprise

Economic system which freedom to consume and produce goods and services exists

Traditional economy

Economic system in which decisions are based on customs and centered on family


Items purchased to satisfy needs and wants


Money left after selling goods and services and costs of operating a business have been paid


Goods that are purchased to add comfort or pleasure to life


Anywhere goods and services exchange hands


Process of giving up something for gaining something else

Market economy

Goods and services are owned and controlled by the people

Freedom of choice

Opportunity to make choices of goods and services and accept consequences of decisions

Command economy

Economics system in which the government owns resources and dictates what is produced

Market price

The point where supply and demand are equal.

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