Key Terms
Someone who acquires goods and services for his or her own personal use.
What is a consumer?
Supply and demand are called this.
What are market forces?
Your family gave you $10 to spend on food at a football game. Buying a hot dog, popcorn, and a soda will cost you all $10, where you have no money left over. You choose to not buy food and keep the $10 which is an example of this.
What is opportunity cost?
An amount of money citizens and businesses are required to pay so that the government can function and provide services.
What is a tax?
Producers battling over who can make the most profit.
What is competition?
The financial gain received by selling something for more than it cost to make.
What is profit?
If the supply of an item increases, demand for this item will do this.
What is decrease?
Jessica designs phones for Apple and finds a new innovation in technology. It will cost more money than they have to create the new iPhone, but will bring in more money for the company. They choose to not use the new innovation, so this is the opportunity cost.
What is more profit?
The tax you pay when you buy something.
What is sales tax?
They own most of the businesses in a market economy.
Who is the producers?
The benefit you give up by choosing to do one thing instead of another.
What is opportunity cost?
If the demand for an item is high and the supply is low, the price of the item will do this.
What is increase?
Kelly can either spend time with her friends or she can go to work and make $150. She chooses to hang out with her friends. This is the opportunity cost.
What is making money?
Often called “death taxes,” the estate tax only applies when everything the deceased person owned is worth a lot of money
What is estate tax?
What is a command economy?
The amount of something that is available and the number of consumers who want it.
What is supply and demand?
Summer is coming, and many people want to buy ice cream from the stores. This situation is an example of this market force increasing.
What is demand?
Your class has a summative test tomorrow, but you have the chance to watch a new movie instead. You choose to go to the movie rather than studying for your test. This is the opportunity cost.
What is getting a good grade on your summative?
The government also imposes this which are taxes on goods that are imported to the U.S. from other countries.
What is tariffs?
This is not a physical place, but it exists in the market economy.
What is the market?
The limited amount of resources available.
What is scarcity?
The first frost of the year came early and half of the apple trees were frozen. The full apple crop is used to make apple products during the fall season. Due to the lack of apples, this will happen to the apple product prices.
What is increase?
At the store, Maddie sees that they have watermelon for sale. They also have her favorite chip brand for sale. Because she only has money for one item, she chooses the watermelon. This is the opportunity cost.
What is eating her favorite chips?
Both the individual and corporate income tax are called this, meaning the more income or profit a person or company has, the higher tax rate they pay.
What are progressive taxes?
This economy exists in primitive cultures where most activity is focused on providing food.
What is a traditional economy?