Economics Chapter 1 and 2

An item lasting more than three years with constant use

• Consumer goods 
• Durable goods 
• Nondurable goods 
• Goods

The customer is always right theory

• Consumer Sovereignty 
• Competition
• Specialization
• Division of Labor 

An economic system where private citizens own the factors of production.

• communism
• socialism
• capitalism
• voluntary exchange

Resources that are not being used to their full potential

• Fully Employed Resources 
• Idle Resources 
• Standard of Living 
• Wealth

Tools, equipment, machinery and factories necessary to produce goods and services

• Entrepreneurs
• Labor
• Capital
• Land

All alternate choices to something people desire 

• Trade Offs
• Opportunity Cost
• Value
• Utility

The dollar value of all goods and services produced in a country’s borders during a 12 month period

• Economic Growth 
• Economic Interdependence 
• Gross Domestic Product 
• Cost Benefit Analysis 

Buyers and sellers exchange goods and money freely in ways that are mutually beneficial to each other. 

• Private Property Rights 
• Consumer Sovereignty 
• Profit Motive 
• Voluntary exchange 

A combination of traditional, command, and market economies. The public usually pays high taxes in this system.

• mixed economy
• market economy
• traditional economy
• command economy

Individuals can do whatever they like to their property as long as it does not harm others. Provides the incentive to work and own items 

• Private Property Rights 
• Consumer Sovereignty 
• Profit Motive 
• Voluntary exchange