eco 2

Value Added

The numerical difference between the value of final products and the cost of raw materials.

Factor Payments

Monetary payments to resource owners involved in value creation, including wages, interest, rent, and profits.

Production Process

The process of organizing labor, capital, and raw materials to transform them into finished goods or services.

Ten Core Principles of Economics

Principles including tradeoffs, opportunity costs, incentives, marginal thinking, the benefits of trade, market organization, government intervention, production capability, effects of money supply on prices, and inflation-unemployment tradeoffs.

Role of Entrepreneurship

Entrepreneurs organize and manage resources, taking on risks to produce goods or services, and are rewarded with profits.

Consumption

The acquisition and use of goods and services to fulfill needs or wants.

Physical Distribution

The transportation of goods from manufacturers to consumers.

Functional Distribution

The distribution of wealth across different income groups.

Inflation-Unemployment Tradeoff

In the short term, society faces a tradeoff between lowering unemployment and controlling inflation.

Productivity

The efficiency with which resources are used to produce goods or services, often measured in terms of output or value added.