wants
Things you wish you could have
needs
Necessary wants; in order to survive.
profit
The amount. of money left over after a business has paid for the cost of producing its goods & services
business cycle
Movement of the economy from one condition to another and back again
competition
The rivalry among businesses to sell their goods and services to consumers
demand
The amount of a good or service that consumers are able and willing to buy at various possible prices during a specified time period.
economic resources
The means through which goods and services are produced
goods
Tangible products that we can see and touch. Used to satisfy our wants and needs.
gross domestic product (GDP)
Total dollar value of all final goods and services produced in a country during a single year
market economy
Economic system in which businesses and individuals are free to make their own decisions as they buy and sell in the marketplace.
scarcity
The condition that results from society not having enough resources to produce all the things people would like to have
services
Activities that are consumed at the same time they are produced
supply
The amount of a good or service that businesses are able and willing to sell at various prices during a specified time period.
capitalism
economic system where private individuals own and control means of production with very little government interference
profit motive
The desire to work hard and be creative to earn a higher profit.
natural resources
Raw materials supplied by nature that come from the earth, the water, or the air and are used to produce goods.
human resources
People who work to produce goods and services
capital resources
The tools, equipment, and buildings that are used to produce goods and services
economic decision making
The process of choosing which wants, among several options, will be satisfied.
productivity
The measurement of the number of items produced per worker
inflation
A sustained increase in the general level of prices for goods and services
deflation
A sustained decrease in the general level of prices for goods and services
prosperity
A period in which most people who want to work are working, businesses produce goods and services in record numbers, wages are good, and the rate of GDP growth increases
recession
A period in which demand begins to decrease, businesses lower production, unemployment begins to rise, and GDP growth slows.
depression
An economic downturn marked by decreasing business activity, rising unemployment, and falling prices and wages.
recovery
The phase in which unemployment begins to decrease, demand for goods and services increases, and GDP begins to rise again
standard of living
A measure of quality of life based on the amounts and kinds of goods and services a person can buy
quality of life
The overall satisfaction and enjoyment a person gets from life
Decision Making Step 1
Define the Problem