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20 terms

basic economic Terms

MME Prep
STUDY
PLAY
supply
the willingness and ability of a producer to produce and sell a product
demand
the desire to have some good or service and the ability to pay for it.
profit
the financial gain a seller makes from a business transaction; the money left over after the costs of producing a product are subtracted from the income gained by selling the product.
labor
all the human time, effort and talent used to produce goods and services
resources
...The collective wealth of a country or its means of producing wealth.
opportunity cost
the value of something that is given up when choosing one alternative over another...
trade off
the alternative someone gives up when making an economic choice...
competition
the effort of two or more people acting independently to get business by offering the best deal....
scarcity
a situation that exists when there are not enough resources to meet human wants....
stock
...shares of ownership in a corporation
risk
the possibility for loss on an investment...
entrepreneur
risk taking individual in search of profits; one of the four factors of production.
sole proprietorship
a business owned and controlled by one person...
corporation
a business owned by shareholders, also called stockholders, who own the rights to the company's profits but face only limited liability for the company's debts and losses....
partnership
a business co-owned by two or more people or partners who agree on how responsibilities, profits, and losses should be divided....
free enterprise
another name for capitalism, an economic system based on private ownership of productive resources....
goods
physical objects, such as food, clothing, and furniture, that can be purchased....
services
work that one person does for another for payment...
needs
things such as food, clothing, and shelter that are necessary for survival....
wants
desires that can be satisfied by consuming a good or service....