Vocabulary 1
What are goods?
Things people can buy and use (tangible).
Wants are...
What does trade mean?
The exchange of goods and services between two or more entities.
What is it called when a country brings goods in?
Imports
Supply is...
How much of something is available.
What are services?
Jobs that people do to help others in exchange for money (intangible).
Needs are...
Things that are necessary to live.
What is specialization?
When a country or entity focuses on producing one thing really well.
What is it called when a country sends goods away?
Exports.
Demand is...
How many people want to buy something.
What do producers do?
Make goods and services.
What is a choice?
When you pick one option instead of the other.
What is another word for trading?
Barter
Country A can produce 6 tons of steel a day or 12 truckloads of coal.
Country B can produce 4 tons of steel a day or 18 truckloads of coal.
Who has the comparative advantage for making steel?
Country A
If demand is high and supply is low, what happens to the price of a good?
It will go up.
What do consumers do?
Buy the goods and services.
Opportunity Cost is...
The next best thing you give up when you choose something else.
Absolute advantage is when...
A country can produce a good or service more efficiently than anyone else.
Island Blue can catch 50 fish or grow 25 baskets of fruit.
Island Green can catch 30 fish or grow 30 baskets of fruit
Which country has the absolute advantage for growing baskets of fruit?
Island Green
Economics is...
The study of how people make choices about using money and other scarce resources.
What is a market?
A place where producers and consumers can go to buy, sell and trade goods and services.
When something makes you want to make a certain choice it is called...
An incentive.
Comparative Advantage is when...
A country can produce a good or service at a lower opportunity cost.
Great Britain sends massive loads of tea on huge ships to America each month. Which country is importing the tea, and which country is exporting the tea?
America is importing, Great Britain is exporting.
What is it called when people or businesses depend on each other to do the things that help them survive?
Interdependence