Glossary Terms:

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

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

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.

To buy and use a good or service.

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

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

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

Tangible objects that satisfy economic wants.

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

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.

Places, institutions or technological arrangements where or by means of which goods or services are exchanged. Also, the set of all sale and purchase transactions that affect the price of some good or service.

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 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.

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

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

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

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

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.

An exchange of goods or services for money.

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.

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.

People employed to do work, producing goods and services.