Glossary Terms:

Capital Chips (Part 1)

Glossary terms from:
http://www.econedlink.org/e263


Benefit

Monetary or non-monetary gain received because of an action taken or a decision made.

Business

Any activity or organization that produces or exchanges goods or services for a profit.

Capital

Resources and goods made and used to produce other goods and services. Examples include buildings, machinery, tools and equipment. In the context of credit transactions, capital is one of the Three Cs of Credit. It is an indicator of how creditworthy a prospective borrower is likely to be as determined by the borrower's current financial assets and net worth.

Capital Resources

Resources made and used to produce and distribute goods and services; examples include tools, machinery and buildings.

Choice

Decision made or course of action taken when faced with a set of alternatives.

Costs of Production

Amounts paid for resources (land, labor, capital and entrepreneurship) used to produce goods and services.

Division of Labor

An arrangement in which workers perform only one step or a few steps in a larger production process (as when working on an assembly line).

Economics

The study of how people, firms and societies choose to allocate scarce resources with alternative uses.

Goods

Tangible objects that satisfy economic wants.

Human Capital

The health, education, experience, training, skills and values of people. Also known as human resources.

Income

Payments earned by households for selling or renting their productive resources. May include salaries, wages, interest and dividends.

Innovation

A new idea or method.

Inventors

Someone who creates or devises a new process, application, machine, or article of application.

Investing

The process of putting money someplace with the intention of making a financial gain. Investment possibilities include stocks, bonds, mutual funds, real estate, and other financial instruments or ventures.

Investment

The purchase of capital goods (including machinery, technology or new buildings) that are used to produce goods and services. In personal finance, the amount of money invested in stocks, bonds, mutual funds and other investment instruments.

Money

Anything that is generally accepted as final payment for goods and services; serves as a medium of exchange, a store of value and a standard of value. Characteristics of money are portability, stability in value, uniformity, durability and acceptance.

Price

The amount of money that people pay when they buy a good or service; the amount they receive when they sell a good or service.

Producers

People and firms that use resources to make goods and services.

Product

A good or service that can be used to satisfy a want.

Production

A process of manufacturing, growing, designing, or otherwise using productive resources to create goods or services used to to satisfy a want.

Productive Resources

Natural resources, human resources, capital resources and entrepreneurship used to make goods and services.

Productivity

The amount of output (goods and services) produced per unit of input (productive resources) used.

Purchases

In a credit arrangement, the total amount spent during the billing cycle.

Purchasing Power

The amount of goods and services that a monetary unit of income can buy.

Resources

The basic kinds of resources used to produce goods and services: land or natural resources, human resources (including labor and entrepreneurship), and capital.

Services

Activities performed by people, firms or government agencies to satisfy economic wants.

Specialization

A situation in which people produce a narrower range of goods and services than they consume. Specialization increases productivity; it also requires trade and increases interdependence.

Standard of Living

The level of subsistence of a nation, social class or individual with reference to the adequacy of necessities and comforts of daily life.

Wants

Desires that can be satisfied by consuming or using a good or service. Economists do not differentiate between wants and needs.