Glossary Terms:

Henry Ford and the Model T: A Case Study in Productivity (Part 2)

Glossary terms from:
http://www.econedlink.org/e676


Business

Any activity or organization that produces or exchanges goods or services for a profit.

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.

Choice

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

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.

Demand

The quantity of a good or service that buyers are willing and able to buy at all possible prices during a period of time.

Division of Labor

An arrangement in which workers perform only one step or a few steps in a larger production process (as when working on an assembly line).

Economic Incentives

Factors that motivate and influence the behavior of individuals and organizations, including firms and government agencies. Prices, profits and losses are important economic incentives in a market economy.

Economics

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

Firms

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

Inventory

An itemized list of goods held by a person or business. Also a quantity of goods held in stock.

Investing

The process of putting money someplace with the intention of making a financial gain. Investment possibilities include stocks, bonds, mutual funds, real estate, and other financial instruments or ventures.

Investment

The purchase of capital goods (including machinery, technology or new buildings) that are used to produce goods and services. In personal finance, the amount of money invested in stocks, bonds, mutual funds and other investment instruments.

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.

Money

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.

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.

Non-price Determinants

Non-price determinants can be interactions that do not affect the price of the wide range of supply and demand factors.

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.

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.

Productivity

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

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.

Save

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

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.

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.

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.