Vocab
Standard of living
The level of wealth, comfort, goods, and necessities available to a person or group.
Subsidy
A government payment or support given to businesses or individuals to help lower costs or encourage production.
Surplus
A situation where the quantity supplied is greater than the quantity demanded.
Foreclosure
The legal process where a lender takes ownership of property because the borrower failed to make payments.
Bonds
A type of investment where an investor loans money to a government or company in exchange for interest payments.
Circular flow chart
A model that shows how money, goods, and services move between households, businesses, and the government in an economy.
Diminishing returns
The point where adding more of one resource leads to smaller increases in production.
Monopoly
A market structure where one company has complete control over a product or service.
Sole proprietorship
A business owned and operated by one person.
Entrepreneur
A person who starts and runs a business while taking financial risks to make a profit.
Fixed costs
Business costs that stay the same no matter how much is produced, such as rent or insurance.
Oligopoly
A market structure controlled by a small number of large businesses.
Inventory
The goods and materials a business has available for sale or production.
Inflation
A rise in the general price level of goods and services over time, which reduces purchasing power.
Variable costs
Business costs that change depending on the amount of goods or services produced.
Laissez-faire
An economic system where the government has little involvement in business and the economy.
Corporation
A large business organization owned by shareholders and recognized as a separate legal entity.
Substitutes/Complements
Substitutes are products that can replace each other, while complements are products often used together.
Equilibrium price
The price where the quantity supplied equals the quantity demanded.
Mortgage
A loan used to buy property or a house that is paid back over time with interest.
Stocks
Shares of ownership in a corporation that can increase or decrease in value.