Glossary Terms:

Lemonade and Cookies

Glossary terms from:
http://www.econedlink.org/e350


Check

A written order to a financial institution directing the financial institution to pay a stated amount of money, as instructed, from the customer's account.

Choice

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

Comparative Advantage

The ability to produce a good or service at a lower opportunity cost than some other producer. This is the economic basis for specialization and trade.

Exports

Goods and services produced in one nation and sold in other nations.

Firms

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

Free Trade

The voluntary exchange of goods and services in the absence of trade barriers and restrictions.

Goods

Tangible objects that satisfy economic wants.

Income

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

Job

A piece of work usually done on order at an agreed-upon rate. Also a paid position of regular employment.

Labor

The quantity and quality of human effort available to produce goods and services.

Land

"Gifts of nature" that can be used to produce goods and services; for example, oceans, air, mineral deposits, virgin forests and actual fields of land. When investments are made to improve fields of land or other natural resources, those resources become, in part, capital resources. Also known as natural resources.

Opportunity Cost

The second-best alternative (or the value of that alternative) that must be given up when scarce resources are used for one purpose instead of another.

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.

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.

Trade

The exchange of goods and services for money or other goods and services.

Wants

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

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.

Workers

People employed to do work, producing goods and services.

World Trade Organization (WTO)

A trade agreement among over 100 nations that specifies the level of tariffs among the signatories and attempts to resolve trade disputes.