Chapter 2: Economic Resources and Systems

Capital Resources

The things used to produce goods and services, also called capital goods

Command Economy

An economic system in which a central authority makes the key economic decisions, the government dictates what will be produced, how it will be produced, and who will get the goods, the government owns and controls all the resources and businesses, there is little choice of what to buy and prices are controlled by the government

Demand

The amount or quantity of goods and services that producers are willing and able to provide at various prices

Economics

The study of how individuals and groups of individuals strive to satisfy their needs and wants by making choices

Economic System

The methods societies use to distribute resources

Entrepreneur

An individual who undertakes the creation, organization, and ownership of a business

Entrepreneurial Resources

Used by the people who recognize opportunities and start businesses

Entrepreneurship

The process of recognizing a business opportunity, testing it in the markets, and gathering the resources necessary to start and run a business

Equilibrium Price

The point at which the quantity demanded and the quantity supplied meet

Factors of Production

All the economic resources necessary to produce a society’s goods and services

Labor Resources

People who make the goods and services for which they are paid, can be skilled or unskilled, physical or intellectual

Market Economy

An economic system in which economic decisions are made in the marketplace

Marketplace

Where buyers and sellers meet to exchange goods and services, usually for money

Mixed Economy

An economy that contains both private and public enterprises, combines elements of capitalism (market economy) and socialism (command economy)

Natural Resources

Raw materials from nature that are used to produce goods and can be processed in various ways to create goods

Opportunity cost

Deciding to use a resource for one purpose means giving up the opportunity to use it for something else.

Price

The amount of money given or asked for when goods and services are bought or sold

Scarcity

Lack of resources

Supply

The amount of goods and services that are bought or sold