Economics Vocab 1

A type of economic system where the economic decisions are based on custom. TRADITIONAL ECONOMY

A type of economic system with minimal government involvement; private individual ownership of property and resources FREE MARKET ECONOMY

A type of economic system where individuals and businesses are owners and decision makers along with some government involvement MIXED ECONOMY

By what we buy (purchase), we determine what goods and services will be produced CONSUMER SOVEREIGNTY

A type of economic system where the government is in control COMMAND ECONOMY

The study of how a society produces goods and services and how it uses scarce resources ECONOMICS

The rivalry between producers or sellers of the same type of good or service COMPETITION

Has one owner who takes ALL the risks and ALL the profits PROPRIETORSHIP

The amount of money left after all expenses and bills have been paid PROFIT

multiple owners share profits and each owner’s liability is based on how much each owner invests; Authorized by law to act as a legal entity CORPORATION

CIRCULAR FLOW OF ECONOMY The way in which resources, goods and services and money flow continuously among households, businesses and the government in the U.S. economy CIRCULAR FLOW OF ECONOMY

Buyers will demand more products when they can buy them at lower prices LAW OF DEMAND

Anything that goes into the making of a good or service FACTORS OF PRODUCTION

a business owner and risk taker ENTREPRENEUR

Using goods and services CONSUMPTION

An example of a factor of production that includes land, water, soil, sun, plants, animals, etc. NATURAL RESOURCES

The inability to satisfy all wants at the same time; the needs and wants are greater than the resources SCARCITY

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

Has two or more owners who share risks and profits PARTNERSHIP

Mechanism to decide who gets goods and services Mechanism to decide who gets goods and services. The amount that satisfies both producers for profit and consumers for value PRICE

An example of a factor of production that includes labor; workers and their time and energy HUMAN RESOURCES

Something that spurs or motivates someone into action: sale, coupons, etc. INCENTIVE

What is given up when a choice is made. The downside to your choice. OPPORTUNITY COST

An example of a factor of production that includes tools, machinery, money, technology CAPITAL RESOURCES

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

Selecting an item or action from a set of possible alternatives CHOICE

Combining human, natural, capital, entrepreneurship resources to make goods and services PRODUCTION

Businesses will provide more products when they can sell them at higher prices LAW OF SUPPLY