Glossary Terms:

No Extra Room on the Mayflower

Glossary terms from:
http://www.econedlink.org/e675


Capacity

In the context of credit transactions, capacity is one of the Three Cs of Credit. It is an indicator of how creditworthy a prospective borrower is likely to be, as determined by the borrower's current and future earnings relative to current debt. High earnings and low debt, for example, indicate a strong capacity to make payments on the loan in question.

Capital

Resources and goods made and used to produce other goods and services. Examples include buildings, machinery, tools and equipment. In the context of credit transactions, capital is one of the Three Cs of Credit. It is an indicator of how creditworthy a prospective borrower is likely to be as determined by the borrower's current financial assets and net worth.

Economics

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

Entrepreneurship

A characteristic of people who assume the risk of organizing productive resources to produce goods and services; a resource.

Firms

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

Goods

Tangible objects that satisfy economic wants.

Human Resources

The health, education, experience, training, skills and values of people. Also known as human capital.

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.

Natural Resources

"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 land.

Resources

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

Scarcity

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.

Services

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

Wants

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