Economics Introduction
economics = the study of how people use resources to produce goods and services
Goods & Services
good = an item that is traded in an economy
service = an activity that a business or person trades for payment
barter = to trade goods or services without using money
service = an activity that a business or person trades for payment
barter = to trade goods or services without using money
Producers & Consumers
producer = the person or business that creates, sells, or offers the good or service
consumer = the person purchasing the good or service
consumer = the person purchasing the good or service
Human, Natural, & Capital Resources
human resources = the people who work for the business
natural resources = materials from the Earth that can be used for the business
capital resources = money and human-made items used for the business
natural resources = materials from the Earth that can be used for the business
capital resources = money and human-made items used for the business
Market Economy
market economy = an economy where the cost of goods and services is determined by the people and businesses
free market = businesses are free to make whatever they want, and people are free to buy whatever they want as long as it isn't against the law
entrepreneur = someone who starts up a business
free market = businesses are free to make whatever they want, and people are free to buy whatever they want as long as it isn't against the law
entrepreneur = someone who starts up a business
Supply, Demand & Competition
supply = the amount of a product or service that is available
demand = the number of consumers who want a certain good or service
competition = many companies sell the same products or services so people have a choice in where to shop
demand = the number of consumers who want a certain good or service
competition = many companies sell the same products or services so people have a choice in where to shop
Incentives
positive incentives = rewards that motivate customers to want the products
negative incentives = consequences that motivate customers to behave in a certain way
negative incentives = consequences that motivate customers to behave in a certain way
Specialization
specialization = when people or businesses focus on producing certain kinds of goods or services
Division of Labor Increases Productivity
division of labor = breaking down the production of a good into many small jobs
Circular Flow
circular flow model = a diagram used to represent the movement of money throughout the economy
Employment & Unemployment
employment = having a job
unemployment = being without a job
unemployment = being without a job
Global Economy
ECON AND ME VIDEO SERIES
Part 1: Scarcity
Part 2: Opportunity Cost
Oh Give Me a Choice
(Tune: Home on the Range)
Oh give me a choice, Opportunity cost!
Oh, a difficult choice, It’s the thing you give up
And I’ll think about what I could use. when you choose.
I’ll have to decide, It’s the price that is paid,
With my eyes open wide, When a choice must be made,
What I’ll give up and what I will choose. It’s the thing that I surely will lose.
From: Economics America: National Council for Economic Education
(Tune: Home on the Range)
Oh give me a choice, Opportunity cost!
Oh, a difficult choice, It’s the thing you give up
And I’ll think about what I could use. when you choose.
I’ll have to decide, It’s the price that is paid,
With my eyes open wide, When a choice must be made,
What I’ll give up and what I will choose. It’s the thing that I surely will lose.
From: Economics America: National Council for Economic Education