• There are some basic economic terms that we need to be aware of for our upcoming Econ test.

Wants

Things we desire to have

Goods

Physical products

Services

Products you can’t touch

Scarcity

The result of an inability to satisfy all of everyone’s wants

EVERYTHING IS SCARCE

Choices

• We can’t have everything we want

• Therefore, we must choose what we get

Opportunity Costs

The best alternative given up when making a decision

Economic Institutions

Established companies or networks of companies that are involved in the production, distribution, or purchasing of goodsand services.

Economics

Studies the choices of people trying to satisfy their wants in a world of scarcity

Economic Systems

a system of production and exchange of goods and services as well as allocation of resources in a society.

Market

Whenever and wherever people voluntarily make exchanges with one

another

Incentives

a payment or concession to stimulate greater output or investment

Money

a current medium of exchange in the form of coins and banknotes; the assets, property, and resources owned by someone or something; wealth.

Productive Resources

natural resources, human resources, and capital resources

Productivity

An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in revenues and other GDP components such as business inventories.

Economic InterpendenceA characteristic of a society or macroeconomy with a high degree of division of labor, where people depend on other people to produce most of the goods and services required to sustain life and living.

 is the total demand for final goods and services in an economy at a given time. It specifies the amounts of goods and services that will be purchased at all possible price levels.

Aggregate Demand

Aggregate Supply

 as the total amount of goods and services (real output) produced and supplied by an economy's firms over a period of time.

Inflation

a persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency

Elasticity of Demand

The degree to which demand for a good or service varies with its price.

Entrepreneurs

• a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.

Trade-offs

Giving up some of one thing in order to get more of another

Decision Making and Cost-Benefit Analysis

• Whenever people decide whether the advantages of a particular action are likely to outweigh its drawbacks

Global Economy

Economic actions taken anywhere in the world may affect an individual’s

standard of living

Microeconomics

Studies the individual or a single business in the economy

Macroeconomics

Studies the economy as a whole

Factors of Production

• Natural resources

• Human resources

• Capital

• Entrepeneurship

Economic Questions

• What goods will be produced?

• How will the goods be produced?

• For whom will the goods be produced?

• the collective skills, knowledge, or other intangible assets of individuals that can be used to create economic value for the individuals, their employers, or their community: 

Human Capital

Foreign Currency

refers to the global market where currencies are traded virtually around-the-clock

Compound Interest

Interest that is added not only to the principal of a loan or savings account but also to the interest already added to the loan or account; interest paid on interest.

Credit

A contractual agreement in which a borrower receives something of value now and agrees to repay the lender at some date in the future, generally with interest. The term also refers to the borrowing capacity of an individual or company

Savings and Investing

• the amount left over when the cost of a person's consumer expenditure is subtracted from the amount of disposable income that he or she earns in a given period of time.