Economics

Term 1: Economics
Definition 1: The study of how goods and services are produced and distributed. Economic activity is generally assumed to occur on the market. Example: The entire discussion of markets, production, labor, and capital falls under the umbrella of economics.
Term 2: Market
Definition 2: Historically, a physical place where goods and services are bought and sold. Today, it also refers to more abstract networks of buying, selling, and production. Example: Different types of markets: investors buy and sell stocks and bonds in the financial markets, individuals can find food and clothing in the retail market, and the housing market helps people buy or rent dwellings.
Term 3: Production
Definition 3: The creation of goods and services that are sold on the market for profit. Example: Producers, or firms, profit when they sell a product by a higher price than it cost to produce. (The act of creating the product is the production.)
Term 4: Profit
Definition 4: What producers or firms earn when they sell a product for a higher price than it cost to produce. Example: Producers, or firms, profit when they sell a product by a higher price than it cost to produce.
Term 5: Consumption / Purchase
Definition 5: Goods and services made available for consumption, or purchase. Example: …goods and services that are available through the market, that is, they are made available for consumption, or purchase.
Term 6: Labor
Definition 6: The work done by humans in an economy to produce goods and services. Example: Examples of labor might be a farmer's tractors, a restaurant's kitchen equipment, or a contractor's tools. Labor turns capital into goods also serviced for sale on the market. (Note: The example given is a bit confusing in the text, as farmer's tractors and kitchen equipment are capital, not labor itself. The text correctly defines labor as work done by humans and then clarifies, The people that do the labor are compensated for it with wages.)
Term 7: Capital
Definition 7: Items (tools, equipment, etc.) used in an economy to produce goods and services. Example: Examples of capital might be a farmer's tractors, a restaurant's kitchen equipment, or a contractor's tools.
Term 8: Traditional Economy
Definition 8: An industrialized economic system, guided by tradition, and often using bartering rather than currency. Example: For instance, farmers in medieval societies might have traded crops for handmade goods like tools.