Econ Terms

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wants

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an item we desire by that is not essential to survival

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command economic system

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economic system in which the central government makes all the decision on the production and consumption

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land national resources

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that are used to make goods and private property and services

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private property

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property owned by individual or companies not by the government or people as a whole

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labor

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effort that people devote to a task for which they may be paid

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technology

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the process used to produce a good or service
factor of production land labor and capital three groups of resources that are used to make all goods and services

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under utilization

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using fewer resources that an economy is capable of using ex the united states and oil

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safety net

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government programs that protected people experiencing unfavorable economic conditions

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profit

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the financial gain made in the transaction

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specialization

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the concentration of the production efforts of individual and times on a limited number of activities

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transition

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period of change in which an economy moves away from a centrally planned economy toward a market based system

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shortage

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a situation in which a good or service is unavailable or a situation in which the quantity demands are greater than the quantity supplied

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economic system-

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method used by a society to produce and distribute goods

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goods

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physical objects such as clothes or shoes

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opportunity cost-

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the most desirable alternative given up as the result of a decision

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competition

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the struggle among producers for the money of consumers, the rivalry among sellers to attract consumers while reducing cost

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firm-

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an organization that uses resources to produce a product which it then sells

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capital

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any human made resources that is used to create other goods and services

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need

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something like air, food, shelter, that is necessary for survival

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household-

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a person or group of people living in the same residence

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production possibilities cure

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a cure that shows alternative ways to make an economy re-secure

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economic growth-

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steady long term increase in real GDP

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economic efficiency

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using resources in such a way as to maximize the production of goods and services

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trade off

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an alternative we sacrifice when we make a decision

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market economic system

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economic system in which decisions on production and consumption of goods and services are based on voluntary exchange in markets

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scarcity-

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limited quantities of resources to meet unlimited wants

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free enterprise system-

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an economic system characterized by private or corporate ownership of capital goods investments that are determined by private decisions rather than by state control; and determined in a free market

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consumer sovereignty

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the power of consumers to decide what gets produced.

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physical capital all human

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made goods that are used to produce other goods and services, tools and buildings

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capital market

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market in which money to lend for periods longer than a year

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entrepreneur

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ambitious leader who combines land labor and capital to create and market new goods and services

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privatize

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to sell to individual states run firms which are then allowed to compete with one another in the market place

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productivity

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value of output produced

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traditional economic system

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economic system that relies on habit custom or ritual, to decide questions of production and consumption of goods and services

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economics

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the study of how people seek to satisfy their needs and wants by making choices

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mixed economy

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econ system that combines the free market with limited govt involvement

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continuum

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a range with no clear division

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laissez faire-

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doctrine that states that government generally should not intervene in the marketplace

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standard of living-

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level of economic prosperity

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market

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an arrangement that allows buyers and sellers to exchange things

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invisible hand-

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term economist use to describe the self regulating nature of the marketplace

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self interest-

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one's own personal gain

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profit

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motive the force that encourages people and organizations to improve their material well-being