Terminology
allocation process of making
choices of which need will be satisfied and how much out resources can be used
to satisfy.
command economy (social economy)
economy where the government determines the economic questions representing the
interest of society.
competition rivalry between
two or more individuals or groups to gain benefits from a third party
(consumer).
economics the study of how
society deals with the allocation of scarce resources to meet unlimited wants
and needs.
exchange giving one thing in
return for some other item.
invisible hand incentive that
guides individuals to choose in the best interest of society by pursuing their
own self-interest.
limited resources not enough
resources to meet all the wants and needs of man.
macroeconomics the branch of
study that examines the whole economy.
market exchange activities
between buyers and sellers of goods and services.
market economy economy in
which the economic questions are decided by individuals in the marketplace.
microeconomics the branch of
study that examines the choices of individuals concerning one product, one firm,
or one industry.
opportunity benefit value
gained by making a certain choice.
opportunity cost value of any
alternative that is given up when a choice is made.
private enterprise system
where individuals take the risk of producing goods or services to make a profit.
private goods goods privately
owned and use to benefit individual owners.
private sector part of an
economy owned by individuals and operated for personal benefit.
profit the difference between
the money received from the sale of a product and the cost of production.
public goods goods and
services available to the whole society.
public sector part of an
economy that is owned by the whole society and operated for the benefit of
society.
scarcity limited resources
meet unlimited wants and needs. Decisions must be made to determine what
needs will be met with the resources.
unlimited wants and needs
human characteristic of never having all wants and needs met.
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