Economics Latest Update Graded A+

Economics Latest Update Graded A+ Any item that can be traded for goods or services Money Anything that has value that can be touched Goods Job done for money Services When there is too much money and it becomes worthless Inflation The way goods and services are produced, bought, and sold Economy How much is available Supply How much people want Demand An economic system in which people choose freely what to buy and sell Market Economy An economic system in which the government makes all economic decisions Command Economy An economy in which production is based on customs and traditions and economic roles are typically passed down from one generation to the next Traditional Economy Market-based economic system with limited government involvement Mixed Economy How much an item costs Price Economies that are rich and have many industries and factories Developed Economies Economies that are poorer and trying to become developed Developing Economies Resources that can be used again or brought back Renewable Resources Resources that cannot be brought back or used again Non-renewable Resources when there is not enough of something to satisfy how much everyone wants of it. Scarcity a measure of how well people live Standard of living the principle that suppliers will normally offer more for sale at high prices and less at lower prices Law of Supply the quantity demanded of a good or service varies inversely with its price Law of Demand "gifts of nature" or natural resources not created by humans Land the tools, equipment, machinery, and factories used in the production of goods and services Capital people with all of their abilities, efforts, and skills Labor The process of creating goods and services Production the resources required to produce the things we would like to have--these are land, capital, labor, and entrepreneurs. Factors of Production a risk- taking individual in search of profits who does something new with existing resources Entrepreneurs the dollar value of all final goods and services and structures produced within a country's borders in a 12 month period. Gross Domestic Product when a nation's total output of good and services increase over time Economic Growth the alternative choices people face in making an economic decision Trade-offs the cost of the next best alternative among a person's choices-the time, money, or resources that are given up or sacrificed to make the final choice Opportunity Cost things you would like to have but are not necessary for survival Wants something like air, food, or shelter that is necessary for survival Need a situation in which a good or service is unavailable; a temporary situation Shortage What goods and services should be produced? How these goods and services should be produced? For whom should these goods and services be produced? Three Economic Questions