| Scarcity
| Resources are limited, so people cannot have all the goods and services they want.
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| Choice
| Deciding between two or more possible alternative objects or actions; called an economic choice for decisions among goods, services, or resources.
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| Opportunity Cost
| The next best alternative that must be given up when a choice is made. Not all alternatives, just the next best choice.
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| Goods and Services
| Objects (goods) or services (activities) that can satisfy people's wants.
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| Resources-Human/Natural/Capital
| Anything used to produce goods and services; all natural, human and human-made aids to the production of goods and services, also called productive resources.
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| Barter/Trade
| The direct trading (barter) or any exchange (trade) of goods and services between people without the use of money.
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| Interdependence
| People depend on each other to provide goods and services; occurs as a result of specialization of production.
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| Specialization
| Production can often be best done by several or many people where each person specializes: does only a part of the job--the part that the person is skilled to do.
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| Money/Medium of Exchange
| A medium of exchange, which is a good (like shells or metal coins or pieces of paper) that can be used to buy other goods and services.
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| Saving
| Not spending all of one's income; the part of income not used for consumption.
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| Spending
| Purchase of currently produced goods or services; using income to buy for consumption.
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| Producers/Production
| People who use resources to make goods and services, also called workers./ The making of goods and services using resources.
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| Consumers/Consumption
| People whose wants are satisfied by using goods and services/using goods and services.
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| Factors of Production
| Resources used by businesses to produce goods and services.
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| Markets
| Any setting where buyers and sellers exchange goods, services, resources, and currencies.
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| Prices
| The value of a good or service stated in money terms.
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| Trade-offs
| Giving up one thing or activity to get some of another.
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| Demand
| A schedule of how much consumers are willing and able to buy at each possible price during some time period
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| Supply
| A schedule of how much producers are willing and able to produce and sell at each possible price during some time period.
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| Competition
| Rivalry among sellers to sell (supply) goods and services, or among buyers to buy (acquire) a service or good.
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| Equilibrium Price
| The market clearing price at which the quantity demanded by buyers equals the quantity supplied by sellers.
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| Entrepreneurs
| The human resource (person) who assumes the risk of organizing the other productive resources to produce goods and services.
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| Profit
| The difference between the total revenue and total cost of producintg and selling a good or service in a business; entrepreneurial income.
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| Functions of Money
| Money is used as or "functions as" a medium of exchange, as a store of value, and as a unit of account.
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| Circular Flow
| A model of an economy showing the interactions between households and business firms as they exchange goods and services and resources in markets.
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| Public Goods
| Goods and services that are provided by the government. They are often goods that individuals don't buy enough of, but provide everyone benefits if widely consumed, such as education or national defense.
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| Economic Systems
| The way a society organizes the production, consumption, and distribution of goods and services.
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| Role of Government
| The economic actions and results of government activities.
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| Taxes
| Required payments of money made to governments by households and business firms.
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| Credit
| The purchase of something using a promise to pay in the future.
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| Unemployment
| The situation in which people are willing and able to work at current wages but cannot find jobs.
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| Shortages and Surpluses
| The situation resulting when the quantity demanded exceeds (shortage) or is less than (shortage) the quantity supplied at the current price of a good, service, or resource.
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| Barriers to Trade
| Government policies or regulation that restricts international trade, such as tariffs and import duties.
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| Exchange Rate
| The price of the currency of one country in terms of another currency, e.g dollars per euro.
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| Incentives
| Things that motivate and influence the behavior of households and businesses. Prices, profits, and losses act as incentives for participants to take action in a market economy.
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| Productivity
| The ratio of output (goods and/or services) to input, or the amount of output produced per unit of productive resources over a period of time.
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| Economic Goals
| The objectives that economies pursue, such as full employment, stability, economic growth, and efficiency.
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| Market Failures
| Situations in which the outcome of the market is not efficient from society's point of view, e.g., the market participants might have no market incentives to avoid polluting the environment.
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| Economic Indicators
| Measures constructed to show where the overall economy has been, is now, or is going.
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| Inflation
| A persistent rise in overall prices.
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| Monetary Policy
| Policy done by a central bank to support the economy, relating to the supply of money, credit, and interest rates.
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| Fiscal Policy
| Policy done by a central spending authority of the government to support the economy, relating to spending and taxes.
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| Economic Institution
| Customs, behaviors, or organizations that are commonly found in an economy. Often used to refer to specific agencies or organizations that have a particular economic objective.
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| Federal Reserve
| The central bank of the United States that makes policy for the money supply, credit, and interest rates.
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| Income Distribution
| The way national income is divided among households in the economy.
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| Comparative Advantage
| Describes a basis for specialization and trade between people or countries based on differences in their resources distribution.
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| Economic Growth
| Percentage increases of some overall measure of the economy, such as GDP.
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