Glossary Terms:

Guess Who's Coming to Dinner

Glossary terms from:
http://www.econedlink.org/e522


Advertising

Using advertisements (public notices, displays or presentations often based on celebrity endorsements, appeals to authority, bandwagon effects and attractive imagery) to promote the sale of goods or services.

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.

Choice

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

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.

Consumers

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

Consumption

Spending by households on goods and services. The process of buying and using goods and services.

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.

Depression

A severe, prolonged economic contraction.

Distribution

The allocation or dividing up of the goods and services a society produces.

Goal

Something a person or organization plans to achieve in the future; an aim or desired result.

Goods

Tangible objects that satisfy economic wants.

Imports

Goods and services bought from sellers in another nation.

Interest

Money paid regularly, at a particular rate, for the use of borrowed money.

Market Economy

An economy that relies on a system of interdependent market prices to allocate goods, services, and productive resources and to coordinate the diverse plans of consumers and producers, all of them pursuing their own self-interest.

Perfect Competition

A market structure in which a large number of relatively small firms produce and sell identical products and in which there are no significant barriers to entry into or exit from the industry. Firms in perfect competition are price takers and in the long run will earn only normal profits.

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.

Principal

An original amount of money invested or lent.

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.

Profit

Income received for entrepreneurial skills and risk taking, calculated by subtracting all of a firm's explicit and implicit costs from its total revenues.

Regulation

Economic regulation is the prescription of price and output for a specific industry, often a natural monopoly. Social regulation is the prescription of health, safety, performance, environmental, output and job standards across several industries.

Resources

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

Risk

The chance of losing money.

Role of Government

Government activity in establishing a framework or rules of the game in economic life. In the United States, this activity involves preserving and fostering competition, regulating natural monopolies, providing information and services to enable the market to work better, regulating externalities, providing certain public goods, offering some economic security and income redistribution to individuals, assuring a sound monetary system and promoting overall economic stability and growth.

Sale

An exchange of goods or services for money.

Services

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

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.

Taxes

Compulsory payments to governments by households and businesses.

Trade

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

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.