Download Key Terms

Unit 7: Principles of Economics
Key Terms
Term
Definition
production
Combining resources to make goods or
provide services
resources
Factors of production that are used in the
production of goods and services,
including human, natural, capital and
entrepreneurial
capital
resources
Man made resources used to produce,
including money and machinery
scarcity
Inability to satisfy all wants
private
Owned or provided by individuals or
businesses
public
Owned or provided by the government
consumption
Using goods and services
consumer
sovereignty
supply
Buyers’ purchases determine what goods
and services are produced
“The consumer is king”
The amount of goods or services
producers are willing to make and sell at
a given price
demand
The desire or ability to buy a good or
service at a given price
price
How much it costs to consume a good or
service
competition
Rivalry between producers for consumers
resulting in better quality goods and
services at lower price
incentive
Reward offered to persuade people to
change economic behavior
profit
The money earned by producers after all
costs of producing a good or service have
been paid
economic
system
The system in which nations make
choices because not all wants and needs
can be satisfied
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