Glossary Terms:

Economics in the Headlines

Glossary terms from:
http://www.econedlink.org/e317


Competition

Attempts by two or more individuals or organizations to acquire the same goods, services, or productive and financial resources. Consumers compete with other consumers for goods and services. Producers compete with other producers for sales to consumers.

Costs

An amount that must be paid or spent to buy or obtain something. The effort, loss or sacrifice necessary to achieve or obtain something.

Costs of Production

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

Demand

The quantity of a good or service that buyers are willing and able to buy at all possible prices during a period of time.

Firms

Economic units that demand productive resources from households and supply goods and services to households and government agencies.

Income

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

Long Run

A period of time long enough for firms to change the quantities of all the resources they use; the exact amount of time varies depending on the industry.

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.

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.

Productivity

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

Quantity Demanded

The amount of a good or service people will buy at a given price in a given period of time.

Quantity Supplied

The amount of a good or service sellers are willing and able to offer at a given price in a given period of time.

Recession

A decline in the rate of national economic activity, usually measured by a decline in real GDP for at least two consecutive quarters (i.e., six months).

Sale

An exchange of goods or services for money.

Substitute

A good or service that may be used in place of another good or service; examples include tap water for bottled water (or vice versa) and movies for concerts (or vice versa).

Supply

The amount of a good or service that producers are willing and able to offer for sale at each possible price during a given period of time.

Work

Effort applied to achieve a purpose or result, often for pay; skills and knowledge put to use to get something done; employment at a job or in a position; occupation, profession, business, trade, craft, etc.