Vocab 1
An economic system where companies are privately-owned, versus being owned by the government, and that assumes companies are built with a purpose of creating economic value through innovation, driven by a profit-motive, and where prices are set by the market via the ebb and flow of supply and demand.
Capitalism
Uses pricing to attract customers.
Price competition
The using of goods and services by people or by the economy in general.
Consumption
The increase in the general level of prices in an economy.
Inflation
The physical assets used to produce goods and services, including machinery, equipment, buildings, and tools.
Capital Goods
A market where a large number of companies provide essentially the same product and sell it at a similar price or the same price, and barriers to entry for new entrants are low.
Pure Competition
When companies offer essentially the same product or service, i.e. Coke and Pepsi, Ford and GM.
Direct Competition
Allowed under strict supervision, when the government believes a large entity, like a utility company, can provides services more efficiently and more cost effectively than multiple smaller ones.
Regulated Monopolies
The reality that people’s wants always exceed the resources available to fulfill those wants.
Scarcity
Competing to attract customers based on features and attributes other than pricing.
Non-price competition
The loss of potential gain from among other alternatives, when one alternative is chosen.
Opportunity Cost
Desires that don’t require money to be obtained, like talking to a friend.
When products or services are not the same, but they could satisfy the same need, i.e. bicycles are indirect competition to automobiles.
Indirect Competition
All the components needed for production including natural resources, labor, capital goods, and expertise.
Resources
The study of behavior and decision-making of individuals and businesses in an economy.
The total amount of goods and services used by an economy.
Total Consumption
The decrease in the general level of prices in an economy.
Deflation
The study of the behavior, performance, structure, and decision-making of an economy as a whole.
Macroeconomics
A market where one company controls the supply of a good or service, where other options for consumers aren't readily available, and where the barriers to entry for other companies are highly restrictive.
Monopoly
The making of products from raw materials and other inputs like labor, machinery, and tools.
Production
the study of how individuals and societies make decisions about resources, production, distribution, exchange, and consumption of goods and services, given unlimited and competing wants, and given the scarcity of resources.
Economics
To categorize, sort, and transport goods to all their final destinations as efficiently, inexpensively, and carefully as possible.
Distribution
Choosing between two things that can’t be had or done at the same time; so it’s giving up something you want in exchange for something else you want, often as a compromise.
Trade Off
Desire for goods, services or intangible items that can only be acquired by spending money – items like a car, or a haircut, or a patent.
Economic Want
A market where a small number of companies control the supply of a good or service, and where the barriers to entry for other companies are highly restrictive.
Oligopoly