Terms
Describes the characteristics of a product that
satisfy wants and needs
Utility
Land, labor, capital, and entrepreneurship
Factors of production
Activity related to making a product
Production
Businesses provide products to meet a
need or want
economic decisions are based on a society’s values, culture, and customs
Traditional economy
A science that examines how goods
and services are produced, sold, and used
Economics
The value of the next best option that was not selected
Opportunity Costs
Finance
Activities involving money
The types of utility are
Form utility
Place utility
Time utility
Information utility
Possession utility
both government and individuals make decisions about economic resources
Mixed economy
Anywhere buyers and sellers meet to buy
and sell goods and services
Market
Develops when demand is higher than the
available resources
Scarcity
Controlling and making decisions about a business
Management
The difference between the income earned and
expenses incurred by a business during a specific
period of time
profit
Found in communist or socialist societies
Command economy
Anything that can be bought or sold;
includes goods and services
Product
All economic resources are limited; needs and wants
are unlimited
The economic problem
There are ____ functions of a business
4
A physical item that can be touched
Good
Scarcity leads to three economic questions
– What should we produce?
– How should we produce it?
– For whom should we produce it?
Level of material comfort measured by the goods, services, and luxuries available.
Standard of Living
process of choosing an option after evaluating the available information and weighing the costs and benefits of the alternatives
Systematic decision making
Activities that identify, anticipate, and satisfy customer demand while making a profit
Marketing
Businesses operate to
earn a profit
individuals are free to make their own economic decisions
Market economy