Civics Chapter 19 Page 514

Term Definition
Goods Tangible products that we use to satisfy our wants and needs.
Services Work preformed by a person for someone else.
Factor 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 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 (GDP) Total dollar value of all final goods and services produced in a county 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 The breaking down of a job into separate, smaller tasks to be preformed individually.
Economic Interdependence A reliance on others, as they rely on you, to provide good 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 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 what products will be produced.
Private Property Rights The freedom to won 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 prices.
Profits The money a business receives for it products or services over and above its cost.
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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