Capitalism
An economic system based on private ownership of capital
Capital
money for investment
command economy
An economic system in which the government controls a country's economy.
competition
the struggle between organisms to survive in a habitat with limited resources
complementary goods
demand
economic interdependence
a reliance on others, as they rely on you, to provide goods and services to be consumed
economic system
Entrepreneur
A person who organizes, manages, and takes on the risks of a business.
equilibrium price
the price that balances quantity supplied and quantity demanded
GDP
Gross Domestic Product- the total market value of all final goods and services produced annually in an economy
Laissez-faire
Idea that government should play as small a role as possible in economic affairs.
Law of Demand
consumers buy more of a good when its price decreases and less when its price increases
Macroeconomics
the study of economy-wide phenomena, including inflation, unemployment, and economic growth
marginal benefit
marginal cost
the cost of producing one more unit of a good
marginal utility
market
a group of buyers and sellers of a particular good or service
market economy
Economic decisions are made by individuals or the open market.
Microeconomics
natural resources
Materials or substances such as minerals, forests, water, and fertile land that occur in nature and can be used for economic gain
product market
the market in which households purchase the goods and services that firms produce
Productivity
The value of a particular product compared to the amount of labor needed to make it.
profit
profit motive
shortage
A situation in which quantity demanded is greater than quantity supplied
Specialization
standard of living
subsidy
A government payment that supports a business or market
substitute goods
Products or services that can be used in place of each other. When the price of one falls, the demand for the other product falls; conversely, when the price of one product rises, the demand for the other product rises.
supply
The amount of goods available
surplus
A situation in which quantity supplied is greater than quantity demanded
Technology
Application of science to help people
Utility