Economics Key Terms

Question Answer
capital resources equipment, buildings, machines, etc. that are used to produce other goods and services
economics study of how resources are used to produce goods and services
entrepreneur person who puts together productive resources to start or expand a business; takes risks in pursuit of profit
human resources people who work to produce goods and services
natural resources “gifts of nature” used to produce goods and services
opportunity cost what you give up when making a choice between two or more possibilities
production process the steps used to bring resources together and produce goods and services
productive resources natural, human, and capital resources used to make goods and services
scarcity we can't have everything we want because resources are limited; this makes prices go up and gives items value
climate temperature and precipitation of a region over time; determines what kinds of products a country can produce
export a good or service that is produced in one country and sold in a different country
geography social science studying the earth and our interactions with the environment
imports goods and services purchased from a different country
interdependence happens when people and nations depend on each other to provide goods and services they want; opposite of self-sufficient
quota limit on number of a good or service that may be imported
self-sufficient a person or nation is not dependent on others to provide goods or services; opposite of interdependence
specialization people or nations produce a few goods and services and trade them for those they don't or can't make for themselves
tariff tax placed on imported goods
trade voluntary exchange of goods and services among people and countries
trade barriers limits (imaginary walls) like tariffs and quotas that countries impose on trade
underdeveloped country also known as low-income countries and some middle-income countries; very poor countries with low standards of living
gross domestic product GDP; value of all goods and services produced in a country in a year
high-income countries wealthiest countries in world; have high standards of living
income money earned
inflation increase in prices over time
low-income countries poorest countries in world; also known as underdeveloped and third world countries
middle-income countries not the poorest or wealthiest countries in the world
human capital education, skills, knowledge, and experience of humans involved in making goods and services
input anything used to produce a good or service
output the goods and services produced from inputs
productivity how much output is produced relative to the inputs used; if this goes up, you have more to sell and higher profits
per capita per person
command economy economic system in which a government is in charge of deciding what goods and services are available and how much they cost
economic systems describe how countries decide to use their scarce productive resources; traditional, command, and market
market anywhere buyers and sellers exchange goods and services
market economy economic system in which individuals are in charge of deciding what to produce; price depends on demand
trade-off getting less of one thing in order to get more of something else
traditional economy economic system in which economic decisions are made based on custom
freedom ability to choose what work to do and goods and services to consume
efficiency using the least costly method to produce goods and services; getting the most out of resources
growth long term increase in the quantity of goods and services that people can buy
security protection against economic risks like inflation, unemployment, and poverty
equity “fairness” in the marketplace and how income is spread out
environmental quality concern for a country's environment and natural resources