Term Definition
goods tangle 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 use to make other goods and services
entrepreneur individual who starts a new business, introduces a new product, and improves a management technique
Gross Domestic Product 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, businesses, regions, and/or nations concentrate on goods and services that they can produce better than anyone else
division of labor breaking down a job into small tasks performed by different workers
economic independence consequence of specialization or the division of labor
capitalism a system in which private citizens own most, if not all of the means of production and decide how to use them within legislated limits
free enterprise economic system in which individuals and business are allowed to compete of profit with a minimum of government interference
consumer sovereignty the role of consumer as the ruler of the market, determining what products will be produced
private property rights goods that, when consumed by one individual, cannot be consumed by another
competition the struggle that goes on between buyers and sellers to get the best products on the market
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 tom 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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