Ch2 Economic Resources and Systems

scarcity
The shortage of economic resources

factors of production
The economic resources used to produce goods and services

natural resources
Raw materials found in nature used to produce goods

human resources
The knowledge, efforts, and skills people bring to their work, also called labor

capital resources
Things such as buildings, materials, and equipment used to produce goods and services

entrepreneurial resources
The initiative to improve goods and services or create new ones

economics
The study of how society chooses to use resources to produce and distribute goods and services for people’s consumption

market economy
A system in which economic decisions are made in the marketplace according to the laws of supply and demand

demand
The amount of goods and services that consumers are willing to buy at various prices

supply
The amount of goods and services that producers will provide at various prices

equilibrium price
The price at which the amount of goods producers supplyh meets the amount of goods consumers demand

command economy
A system in which a central authority such as the state makes the key economic decisions

mixed economy
A combination of a command and a market economy

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