Term Definition
goods tangible products that we use to satisfy our wants and needs
services work performed by a person for someone else
factors of production resources necessary to produce goods and services
natural resources gifts of nature that make production possible
labor human effort directed toward producing goods and services
capital previously manufactured goods used to make other goods and services
entepreneur individual who starts a new business, introduces a new product, and improves a management technique
Gross Domestic Product (GDP) total dollar value of all final goods and services produced in a country during a single year
standard of living the material well-being of an individual, group, or nation measured by how well their necessities and luxuries are satisfied
market free and willing exchange of goods and services between buyers and sellers
factor market a market where productive resources are bought and sold
product market a market where producers offer goods and services for sale
productivity the degree to which resources are being used efficiently to produce goods and services
specialization when people, business, regions, and/or nations concentrate on goods and services that they can produce better than anyone else
division of labor the breaking down of a job into separate, smaller tasks to be performed individually
economic interdependence a reliance on others, as they rely on you to provide goods and services to be consumed
capitalism a system in which private citizens own most, if not all, of the means of production and decide how to use them within the legislated limits
free enterprise economic system in which individuals and businesses are allowed to compete for profit with a minimum of government interference
consumer sovereignty the role of consumer as the ruler of the market, determining which products will be produced
private property rights the freedom to own and use our own property as we choose as long as we do not interfere with the rights of others
competition the struggle that goes on between buyers and sellers to get the best products at the lowest price
profit the money a business receives for its products or services over and above its costs
profit motive the driving force that encourages individuals and organizations to improve their material well-being
voluntary exchange the act of buyers and sellers freely and willingly engaging in market transactions
laissez-faire economics economic system where government should not interfere in the marketplace

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