24 terms

Economics Unit 1: Economic Systems

Basic terms used to describe fundamental principles of economics and different economic systems.
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economics
the study of how people, businesses and governments choose to use their limited resources to satisfy their unlimited wants
scarcity
not enough of a resource to satisfy a person's needs or wants
resources
things people use to satisfy their needs and wants
goods
tangible things that you can buy or sell
services
work that is performed by a person for money
factors of production
how a good is produced (natural resources, labor, capital, entrepreneur)
entrepreneur
the person who created the idea for a product
labor
workers
capital
money or property that is necessary to produce a good
natural resources
things that come from the earth that are used to satisfy people's needs and wants
needs
things you need to survive
wants
things you want, but don't need to survive
limited
having an end, stopping at a certain point
unlimited
having no end, continuing forever
opportunity cost
what is given up, or lost, when a decision is made
market system
economic system in which individuals and businesses have the freedom to make economic decisions (capitalist, free enterprise)
command system
economic system in which the government plans and controls the all production (centrally planned)
mixed economy
a mixture of a market and command economic system in which individuals and businesses have some economic freedom and the government has some economic control
GDP
Gross Domestic Product, or the total amount of money earned by a country in a year
GDP per capita
average amount of money earned by one person in a year
unemployment rate
the percentage of people who do not have jobs
trade
exchange or give (something) in exchange for
import
commodities (goods or services) bought from a foreign country
export
commodities (goods or services) sold to a foreign country