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Economics
Study of choices to satisfy wants.
Scarcity
Limited resources versus unlimited desires.
Opportunity Cost
Value of the next best alternative forgone.
Benefit/Cost Analysis
Evaluating options based on advantages and disadvantages.
Incentives
Factors that motivate individuals to act.
Factors of Production
Resources used to produce goods and services.
Land
Natural resources for production.
Labor
Effort devoted to tasks for payment.
Capital
Human-made resources for creating goods.
Entrepreneurship
Risk-taking in starting and managing businesses.
Trade-offs
Alternatives given up when making a choice.
Wage Comparison
Differences in pay between job options.
Market Economy
Economy driven by profit and competition.
Shortages
Producers unable to supply goods at prices.
Wealth
Subjective evaluation of well-being.
Exchange Benefits
Mutual gains from voluntary trade.
Decision-Making Grid
Tool for identifying opportunity costs.
Implicit Analysis
Unspoken evaluation of benefits and costs.
Explicit Analysis
Clear and stated evaluation of options.
Holiday Pay
Compensation rates for work on holidays.
Health Insurance
Coverage for medical expenses provided by employers.
Production Facilitation
Process of creating goods desired by society.
Decision-Making Grid
Framework for analyzing benefits and costs of choices.
Thinking at the Margin
Evaluating additional benefits from incremental changes.
Production Possibilities Graph
Illustrates alternative resource allocation in an economy.
Production Possibilities Frontier
Maximum output line for an economy's resources.
Efficiency
Maximizing production using available resources effectively.
Economic Growth
Increase in output due to more resources or technology.
Cost in Production Graph
Trade-off shown when increasing production of one item.
Economic Systems
Methods societies use to produce and distribute goods.
Traditional Economy
Decisions based on customs and historical practices.
Market Economy
Decisions made by individuals based on trade.
Centrally Planned Economy
Central government controls production and consumption decisions.
Mixed Economy
Combines tradition, market forces, and limited government.
Market
Arrangement for buyers and sellers to exchange goods.
Specialization
Focus on limited activities for increased productivity.
Free Market Economy
Households and firms exchange goods and services freely.
Self-Interest
Motivating force behind buyer and seller decisions.
Competition
Producers vying for consumer dollars in the market.
Consumer Sovereignty
Consumers influence business production decisions.
Extra Study Time
Additional hours dedicated to studying for better grades.
Extra Sleep Time
Additional hours dedicated to sleeping for rest.
Adult Approval
Seeking validation from adults for personal choices.
Personal Satisfaction
Contentment derived from achieving personal goals.
Invisible Hand
Self-regulating nature of free market economies.
Economic Freedom
Highest degree of freedom in free market systems.
Economic Efficiency
Optimal use of resources in free markets.
Economic Growth
Increase in goods and services output over time.
Socialism
Philosophy advocating wealth distribution through democracy.
Centrally Planned Economy
Government controls production and pricing decisions.
Communism
Political system with total government economic control.
Soviet Agriculture
State-owned farms for agricultural production in USSR.
Consumer Goods Scarcity
Limited availability and poor quality in Soviet markets.
Heavy Industry Preference
Focus on steel and machinery over consumer goods.
Centrally Planned Economy Problems
Issues include poor quality, shortages, and inefficiency.
Laissez Faire
Doctrine opposing government interference in markets.
Mixed Economy
Combines free market with government intervention.
Free Enterprise
Business conduct with minimal government interference.
Government's Role in Economy
Purchases goods and services in product market.
Economic Rights Protection
Government safeguards Americans' economic freedoms.
Consumer Influence
Consumers affect producers through purchasing decisions.
Public Interest
Concerns of society as a whole.
Public Policy
Laws addressing public interest concerns.
Interest Group
Private organization influencing public officials.
Public Disclosure Laws
Require companies to inform consumers about products.
Poverty Threshold
Income level needed to support households.
Poverty Threshold
Federal standard for determining poverty levels.
Welfare
Government aid programs for the poor.
Cash Transfers
Direct monetary payments to eligible individuals.
TANF
State-managed funds for needy families.
Social Security
Cash transfers for elderly and disabled individuals.
Unemployment Insurance
Compensation for workers who lose jobs.
Workers' Compensation
State funds for injured employees.
In-kind Benefits
Goods/services provided at low or no cost.
Medicare
Health insurance for elderly and disabled.
Medicaid
Health insurance for low-income individuals.
Market Failure
Inefficient resource distribution by the market.
Public Good
Shared service impractical to charge individually.
Free Rider
Beneficiary of public goods without payment.
Externality
Economic side effect affecting third parties.
Positive Externalities
Benefits from an economic activity to others.
Negative Externalities
Costs imposed on others by economic activities.
Business Cycle
Fluctuations in economic growth and contraction.
GDP
Value of all final goods/services in an economy.
Employment
Goal to provide jobs for all able workers.
Economic Growth
Increase in goods/services for future generations.
Economic Stability
Confidence in the economy and financial institutions.
Patent
Exclusive rights for inventors for 20 years.
