Chapter 18
What are requirements for survival, such as food, clothing, and shelter
Needs
A tangible products that we use to satisfy our wants and needs
Goods
The desire, willingness, and ability to buy a good or service
Demand
the methods or processes used to make goods and services
Technology
goods that, when consumed by one individual, cannot be consumed by another
Private Goods
What is not having enough resources to produce all of the things we would like to have
Scarcity
Work performed by a person for someone else
Services
the amount of satisfaction one gets from a good or service
Utility
situation in which the quantity supplied is greater than the quantity demanded
Surplus
Situation in which a company pulls a product off the market or agrees to change it to make it safe
Recall
What is the alternative you face if you decide to do one thing rather than another
Trade-Off
individuals who start new businesses, introduce new products, and improve management techniques
Entrepreneur
a competing product that consumers can use in place of another
Substitute
situation in which quantity demanded is greater than quantity supplied
Shortage
part of the business cycle in which economic activity increases
Expansion
What is an economic model that compares the costs and benefits of a decision
Cost-benefit Analysis
the total dollar value of all final goods and services produced in a country during a single year
Gross Domestic Product (GDP)
decreasing satisfaction or usefulness as additional units of a product are acquired
Diminishing Marginal Utility
suppliers will normally offer more for sale at higher prices and less at lower prices
Law of Supply
part of the business cycle in which the nation’s output does not grow for at least six months
Recession
An economic system in which individuals and businesses are allowed to compete for profit with a minimum of government interference
Free Enterprise
The role of the consumer as the ruler of the market, determining what products will be produced
Consumer Sovereignty
measure of responsiveness relating a change in quantity demanded to a change in price
Demand Elasticity
the price at which the amount producers are willing to supply is equal to the amount consumers are willing to buy
Equilibrium price
the federal government’s use of spending and taxation policies to affect overall business activity
Fiscal policy