Unit 10 Economics: Vocabulary, Economic Systems, Types of Businesses, Characteristics of US Economy
Terms in this set (23)
The inability to satisfy all wants at the same time. All resources and goods are limited. This requires that choices be made.
Selecting an item or action from a set of possible alternatives. Individuals must choose/make decisions about desired goods and services because these goods and services are limited.
what is given up when a choice is made- the highest valued alternative forgone. Individuals must consider the value of what is given up when making a choice.
the amount of money exchanged for a good or service
The amount of a good or service that producers are willing and able to sell at a certain price.
Things needed to make goods or provide services.
There are human, natural, capital, examples of these
using goods and services.
the combining of human, natural, capital, and entrepreneurship resources to make goods or provide services.
The amount of a good or service that consumers are willing and able to buy at a certain price.
What determines price?
Interaction of supply and demand
Central ownership of resources, central decision-making
No government involvement in economy
Private and public sector. Some resources owned by government, others owned by individuals.
People perform same economic activities as their ancestors
Profit consists of earnings after all expenses have been paid. In the United States, individuals have the opportunity to create a business and earn profits. The main function of business is to make a profit! To make money!
Individuals and businesses have the right to own real and personal property as well as the means of production without undue interference from the government. The government provides a structure to define and enforce such property rights.
Markets are generally allowed to operate without undue interference from the government. Prices are determined by supply and demand as buyers and sellers interact in the marketplace.
Whenever/wherever buyers and sellers exchange goods and services
Rivalry between producers/sellers of a good or services results in better quality goods at a lower price
Consumers determine through purchases, what goods and services will be produced.
Type of business with one owner who keeps all the profit but takes on all the risk
Type of business with two or more owners who share profit and risk
Type of business with many owners, liability limited to your investment, difficult to form, double taxation
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