Glossary Terms:

Specialization and the Decathlon

Glossary terms from:
http://www.econedlink.org/e963


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.

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.

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.

Exports

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

Goods

Tangible objects that satisfy economic wants.

Imports

Goods and services bought from sellers in another nation.

Income

Payments earned by households for selling or renting their productive resources. May include salaries, wages, interest and dividends.

Interdependence

A situation in which decisions made by one person affect decisions made by other people, or events in one part of the world or sector of the economy affect other parts of the world or other sectors of the economy.

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.

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.

Productivity

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

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.

Trade

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