Economics Vocabulary

Incentives things that incite or motivate you to change your economic behavior

Consumer sovereignty consumers determine through purchases what goods and services will be produced

Price the amount of money exchanged for a good or service

Profit consists of earning after all expenses have been paid

Circular flow resources, goods, services, and money flowing throughout the economy

Opportunity cost what is given up when a choice is made- the highest valued alternative

Sole proprietorship a business owned by one person who takes all of the risks and all of the profits

Private property property owned by individuals and businesses for use without undue interference by the government

Resources factors of production that are used in the production of goods and services

Production the combining of human, natural, capital, and business resources to make goods and services

Entrepreneur a person who takes a risk to produce goods and services in search of a profit

Scarcity the inability to satisfy all wants at the same time

Competition rivalry between producers and sellers of goods and services that results in better quality goods and services at a lower price

Human resources time, energy, and skills needed to produce goods and services

Corporation a large business with many owners called stock holders

Natural resources the resources from the land that are needed to produce goods and services

Consumption using goods and services

Choice selecting an item or action from a set of alternatives

Partnership a form of business owned by 2 or more individuals who share all of the risks and profits

Capital resources the tools, machinery, factories and money that are used in providing goods and services

Supply the amount of a good or service that producers are willing and able to sell at a certain price

Demand the amount of a good or service that consumers are willing and able to buy at a certain price

Consumer people who buy and use products

Producer people who use resources to provide goods and services

Economy the management of the resources of a country