Glossary Terms:

One of many choices or courses of action that might be taken in a given situation.

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

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.

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.

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

A conclusion reached after considering alternatives and their results.

The institutional framework of formal and informal rules that a society uses to determine what to produce, how to produce and how to distribute goods and services.

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.

A piece of work usually done on order at an agreed-upon rate. Also a paid position of regular employment.

The degree of competition in a market, ranging from many buyers and sellers to few or even single buyers or sellers.

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.

Exclusive privilege or control over a service/commodity in a specific market.

A market structure in which there is a single supplier of a good or service. Also, a firm that is the single supplier of a good or service for which there are no close substitutes; also known as a monopolist.

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.

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

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

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.

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

A good or service that may be used in place of another good or service; examples include tap water for bottled water (or vice versa) and movies for concerts (or vice versa).

The exchange of goods and services for money or other 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.