Chapter 5 Economic Vocabulary

economic growth

an increase in the quantity of goods and services a nation can produce

extensive growth

the production of more goods and services because business firms are using more land, labor, or financial capital

intensive growth

the production of more goods or services by using existing factors of production with greater efficiency

consumer goods

items that are purchased for personal use

capital goods

items that are used to produce consumer goods; also called real capital

consumer goods/ capital goods tradeoff

the allocation of limited resources to produce either consumer goods or capital goods

labor intensive

describes a business firm that uses a great deal of human labor relative to real capital

capital intensive

describes a business firm that uses automated equipment than human labor

egalitarian fairness

a viewpoint maintaining that each person in the nation has a right to a part of the nation's wealth simply because he is a part of the human race

economic leveling

an equal distribution of the nation's income regardless of each person's ability to contribute to its pool of wealth

libertarian fairness

a viewpoint maintaining that the only economic right to which citizens are entitled is the right to own and use property free of governmental interference and that the accumulation of wealth is the sole responsibility of each individual

Economic Darwinism

another name for the libertarian view of economic fairness allowing for a "survival of the fittest" in the accumulation of wealth