Glossary Terms:

Should LeBron James Mow His Own Lawn?

Glossary terms from:
http://www.econedlink.org/e794


Absolute Advantage

The ability to produce more units of a good or service than some other producer, using the same quantity of resources.

Alternative

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

Benefit

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

Choice

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

Comparative Advantage

The ability to produce a good or service at a lower opportunity cost than some other producer. This is the economic basis for specialization and trade.

Consume

To buy and use a good or service.

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.

Economics

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

Exchange

Trading a good or service for another good or service, or for money.

Exports

Goods and services produced in one nation and sold in other nations.

Gains from Trade

The increased output resulting from trade; with trade, each individual, region or nation is able to concentrate on producing goods and services that it produces efficiently, while trading to obtain goods and services that it does not produce.

Goods

Tangible objects that satisfy economic wants.

Imports

Goods and services bought from sellers in another nation.

Labor

The quantity and quality of human effort available to produce goods and services.

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.

Opportunity Cost

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.

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.

Production

A process of manufacturing, growing, designing, or otherwise using productive resources to create goods or services used to to satisfy a want.

Resources

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

Services

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

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.

Trade

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

Wants

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

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.