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Economics Chapter 1 & 2 Vocab
Terms in this set (30)
Worth of a good or service as determined by the market.
Social science dealing with the study of how people satisfy seemingly unlimited and competing wants with the careful use of scarce resources .
Tools, equipment, and factories used in the production of goods and services; one of four factors of production.
Fundamental economic problem facing all societies that results from a combination of scarce resources and people's virtually unlimited wants.
Cost of the next best alternative use of money, time, or resources when one choice is made rather than another.
Sum of tangible economic goods that are scarce, useful, and transferable from one person to another; excludes services.
People with all their abilities and efforts; one of four factors of production.
Alternatives that must be given up when one is chosen rather than the other.
Standard of living
Quality of life based on ownership of necessities and luxuries that make life easier.
Tangible economic product that is useful, relatively scarce, transferable to others; used to satisfy wants and needs.
Tool, equipment, or other manufactured good used to produce other goods and services.
Process of using up goods and services to satisfy wants and needs.
Basic requirement for survival: food, clothing, and shelter.
A way of expressing a need.
Work or labor performed for someone.
Production possibilities frontier
Diagram representing maximum combinations of goods and/or services an economy can produce when all productive resources are fully employed.
Process of creating goods and services with the combined use of land, capital, labor, and entrepreneurship.
Market where productive resources are bought and sold.
Products that do not have to be purchased frequently. For example, appliances, sporting goods, etc.
Free enterprise economy
Market economy in which privately owned businesses have the freedom to operate for a profit with limited government intervention.
Federal program of disability and retirement benefits that covers most working people.
Organized way a society provides for the wants and needs of its people.
Driving force that encourages people and organizations to improve their material well-being; characteristic of capitalism and free enterprise.
Income that does not increase even though prices go up.
Economic system in which private citizens own and use the factors of production in order to generate profits.
Economic system characterized by a central authority that makes most of the major economic decisions.
People carry on their economic affairs freely, but are subject to some government intervention and regulation.
Extent to which persons or organizations are better off at the end of a period than they were at the beginning.
Act of buyers and sellers freely and willingly engaging in market transactions; characteristic of capitalism and free enterprise.
Private property rights
Allows individuals to own and control their possessions as they wish.
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