bartering—Also called trading, it is to trade things without money,

like trading baseball cards.

CPI – Measures and compares the value of the dollar over time using

competition—What occurs between two or more businesses as they

try to offer the best goods and services to consumers. Competition

can mean lower prices and even a lower profit for the businesses

competing, which benefits the consumer.

consumer—A person who uses goods and services to satisfy wants

and needs.

cost of human resources—The expense of keeping a business

running, including the supplies needed and the physical or emotional

effect of work on the employees.

Corporation- Company owned by stock holders

demand—The amount of goods and services for which consumers

are willing to pay.

economic choice—A choice a consumer has to make when he or she

is faced with two or more different uses for their resources, such as

which good to purchase with the resource of money.

economics—The study of the economy, a system where production

and consumption maintain the wealth of that system.

equilibrium price—Also known as the market price, this is the price

at which the amount offered is the same as the amount demanded, a

compromise between the buyer and seller.

Factors of Production- Land, labor, capital, and entrepreneurship

goods—Things people make that you can hold or touch and that

satisfy consumer wants and needs; examples include stereos, cars,

books, food, and clothing.

Gross Domestic Product- Total amount produced in a country over a year

incentive- any factor (financial or non-financial) that enables or motivates a particular course of action,

law of supply and demand—Supply is the quantity of a product that

producers are willing and able to make and sell for different prices, and

demand is the amount of goods and services for which consumers are

willing to pay. This law states that supply and demand must be at

equilibrium in order for the buyer and the seller to reach a compromise.

marketplace—A setting where people buy and sell goods and

services, like a store or even the Internet.

market price—Also known as the equilibrium price, this is the price

at which the amount offered is the same as the amount demanded, a

compromise between the buyer and seller.

medium of exchange—What people use to purchase goods and

services; money, checks, and credit cards are all mediums of exchange.

money—A good that is used to exchange for other goods or services;

accepted by people because everyone can agree on what it is worth.

needs—Essential desires, such as food, clothing, and shelter, that

may be fulfilled through the consumption of goods and services.

opportunity cost—A product that you want but do not buy so that

you can buy something else.

15

partnership—A form of business between two or more people where

each partner shares equal responsibility for the tasks required of the

business, as well as the profit.

personal taste—One of the factors that affects the law of supply and

demand. A person’s taste may strongly affect whether they purchase

one good or service over another.

price—The value of a good or service stated in monetary terms.

When the price of an item is lower than the market price, demand is

greater. When it is higher, demand is less.

producers—The people and companies that make goods, such as

farmers and manufacturers.

profit—The difference between revenue and cost, or how much

money is earned minus how much was spent to make that money.

purchase—To buy goods and services by paying a certain price.

scarcity—When we are not able to have all the goods and services we

want.

supply—The quantity of a product that producers are willing and

able to make and sell for different prices at a particular time.

services—Activities that satisfy consumers’ wants and needs, but

unlike goods, cannot be touched or held. Museums, police

departments, barber shops, and public parks all provide services.

Sole proprietorship- Individual ownership of a company

trading—Also called bartering, it is to trade things without money,

like trading baseball cards.

wants—Desires that may be fulfilled through the consumption of a

good, such as a new stereo or service, such newspaper delivery.