Glossary Terms:

The Ice Cream Stand

Glossary terms from:
http://www.econedlink.org/e853


Business

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

Business Plan

A description of an enterprise including its name, its goals and objectives, the product(s) sold and distributed, the work skills needed to produce those products, and the marketing strategies used to promote them.

Cash

Money in the form of paper currency or coins (as distinct from checks, money orders or credit).

Competition

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.

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.

Direct Relationship

The relationship that exists when the values of related variables move in the same direction. Also known as a positive relationship.

Equilibrium Price

The price at which the quantity demanded by buyers equals the quantity supplied by sellers; also called the market-clearing price.

Goal

Something a person or organization plans to achieve in the future; an aim or desired result.

Labor

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

Long Run

A period of time long enough for firms to change the quantities of all the resources they use; the exact amount of time varies depending on the industry.

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.

Premium

The fee paid for insurance protection.

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.

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.

Quantity Demanded

The amount of a good or service people will buy at a given price in a given period of time.

Quantity Supplied

The amount of a good or service sellers are willing and able to offer at a given price in a given period of time.

Sale

An exchange of goods or services for money.

Short Run

A period of time long enough for existing firms to change some--but not all--of the resources they use.

Shortage

The situation that results when the quantity demanded for a product exceeds the quantity supplied. Generally happens because the price of the product is below the market equilibrium price.

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.

Surplus

The situation that results when the quantity supplied of a product exceeds the quantity demanded. Generally happens because the price of the product is above the market equilibrium price.

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.