Economics 40 terms by RichardParkerMD TEACHER

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1 Economics 40 terms by RichardParkerMD TEACHER Economy The careful use or management of resources such as money, materials or labor (workers) Economic Development Depends on the production, distribution, and consumption of goods and services. Production The making of goods. Producers Owners and workers. Distribution The passing out or selling of goods. Consumption The use of goods and services. Consumers People who buy goods and use services. Services Producers perform Factors of Production The ingredients, or elements, needed for production to occur. flash cards/ 1/5

2 Natural Resources Raw materials used to make goods--land, water, forest, minerals and climate. Entrepreneurs People who have the ideas that bring natural resources, labor, and capital together to produce goods. Capital Resources Money, buildings, machines and supplies. Labor Resources Workers needed to create goods and services--knowledge, skills and experience Industries Agriculture, manufacturing, wholesale, retail, service. Agriculture industry Takes natural resources from the earth-- mining, fishing, and farming. Manufacturing industry Makes products using natural resources-- construction, factories, and processing plants). Wholesale industry The sale of goods in large quantities, as for resale by a retailer. Retail industry The sale of goods or commodities in small quantities directly to consumers. flash cards/ 2/5

3 Service industry Provides a service, such as restaurants, supermarkets, hotels, hospitals, etc. Economic Systems Communism, free market, socialism. Communism (command) Government decides what needs are to be met, found in unlimited governments. Free Enterprise (market) Consumers decide what to produce and purchase, prices are determined by supply and demand, found in limited governments. Socialism (mixed) Some businesses and industries are controlled by the government; government provides many health and welfare benefits, found in both limited and unlimited governments. Scarcity Lack of natural resources. Lack of workers (labor resources). Lack of money (capital resources). Lack of consumers. Lack of technology. Creates barriers to economic development. Economic Indicators Measures that show how a country's economy is doing. Most common: life expectancy, literacy rate, gross domestic product (GDP). flash cards/ 3/5

4 Life Expectancy (economic indicator) The average age to which people in a country live (gives clues about health care and nutrition). Literacy Rate (economic indicator) Shows the percentage of people in a country who can read and write at an elementary school level. Gross Domestic Product (GDP economic indicator) The yearly average of all goods and services produced within a country. GDP per Capita The gross domestic product per person. Developing Nations Countries with low levels of development. It is marked by few jobs in industries, poor services, low literacy rates, and low life expectancy. Industrialized Nations Countries with high levels of development. It is marked by high quality education, advanced health care, good services, advanced technology and decent salaries. Surplus A situation where supply is greater than demand. There is more of something than is needed or wanted. Deficit A situation where more is spent than is produced. flash cards/ 4/5

5 Economic Interdependence A situation in which countries rely on each other to provide goods and services Barriers Things that make it difficult and costly for an organization to enter a particular industry and provide goods and services. Free Enterprise An economic system in which private business operates in competition and largely free of government control. Supply and Demand In a free market, the quantity of a product and how many people want the product. Prices Rise Low supply and/or high demand. Prices Fall High supply and/or low demand. Infant Mortality The percentage of children who die before their first birthday in a particular country. flash cards/ 5/5