Unit 1 Vocab - Economics Honors

need

something *essential* for *survival*

want

something we *desire*, but is not necessary for survival

goods

physical *objects* that someone produces

services

*actions/activities* that one person performs for another

scarcity

we have *unlimited wants*, but there is a *limited amount* of goods & services to meet those desires

economics

the study of how people seek to satisfy their needs & wants by *making choices*

consumer

a *person* purchasing goods/services

producer

the *business* making goods/services

shortage

when consumers want more of a good/service than *producers are willing to provide*

entreprenuer

a person who decides how to combine resources to create new goods & services

opportunity costs

the most desirable alternative someone gives up

land

‘gifts of nature’

capital

tools/equipment

labor

people.

communism

gov controls all aspects of the economy

socialism

gov. controls most aspects of the economy

capitalism

gov. does not frequently interfere w/ the economy.

market

buyers & sellers go to exchange

specialization

the concentration of productive efforts of individuals and businesses on a limited # of activities.

laissez-fair

the gov. should not interfere w/ the economy whatsoever.

circular flow model

how money moves in an economy from producer to consumer.

incentive

hope of reward or fear of punishment that encourages ppl to behave a certain way

command economies

the government makes all economic descisions

factor market

what individuals contribute to companies (workers)

product market

what businesses contribute to everyday households (goods & services)

self-interest

our personal gains

competition

the struggle among producers for the $$$ of consumers

free-market economy

individuals and businesses determine what is made, bought, and sold

mixed economy

some market-based elements and some gov. involvement

monopoly

one producer owns all of the supply

marginal analysis

an examination of the additional benefits compared to the costs.

efficiency

the use of resources to maximize the output of goods and services

law of increasing costs

increasingly expensive trade offs.

underutilization

any point inside of the production possibilities frontier