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Economics
The study of how people seek to satisfy their needs and wants by making choices
Constraint
limitation or restriction
Opportunity cost
the most desirable alternative given up as the result of a decision
Microeconomics
the study of how households and firms make decisions and how they interact in markets
Macroeconomics
the study of economy-wide phenomena, including inflation, unemployment, and economic growth
Goods
Items purchased to satisfy needs and wants
Service
Any activity that fulfills a human want or need and returns money to those who provide it.
Consumer
A person who purchases goods and services for personal use
Consumption
Spending by households on goods and services, with the exception of purchases of new housing
Economic resource
The means through which goods and services are produced
Factors of production
Land, labor, capital, entrepreneurship
Land
all natural resources used to produce goods and services
Labor
Human effort directed toward producing goods and services
Capital
Human-made resources used in the production of goods and services.
Human capital
the skills and knowledge gained by a worker through education and experience
Entrepreneurship
The activity of setting up a business or businesses, taking on financial risks in the hope of profit.
Rival nature
a type of product or service that can only be possessed or consumed by a single user, creating competition and demand for it.
Non-rival nature
A good that can be consumed or possessed by multiple users
Economic systems
the method used by a society to produce and distribute goods and services
Traditional economy
economic system that relies on habit, custom, or ritual to decide questions of production and consumption of goods and services
Market economy
an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services
Capitalism
an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.
Command economy
an economy in which production, investment, prices, and incomes are determined centrally by a government.
Mixed economy
an economic system combining private and public enterprise.
