Glossary Terms:

A spending-and-savings plan, based on estimated income and expenses for an individual or an organization, covering a specific time period.

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

Examining different brands or models of a product (to learn about variations in quality, size, etc.), or the prices charged by different sellers (to learn about possible cost-savings), before deciding what to buy.

People who use goods and services to satisfy their personal needs and not for resale or in the production of other goods and services.

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

The opportunity to borrow money or to receive goods or services in return for a promise to pay later.

A conclusion reached after considering alternatives and their results.

Tangible objects that satisfy economic wants.

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.

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.

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

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

To keep money for future use; to divert money from current spending to a savings account or another form of investment.

Disposable income (income after taxes) minus consumption spending.

The condition that exists because human wants exceed the capacity of available resources to satisfy those wants; also a situation in which a resource has more than one valuable use. The problem of scarcity faces all individuals and organizations, including firms and government agencies.

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

Use money now to buy goods and services.

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