Chapter 3 Vocabulary

the study of the consumption, production, distribution, and exchange of goods and services economics

tangible (touchable) things such as food, clothing, cars, MP3 players, and DVDs goods

are activities people do for a fee services

The person or business that makes the goods or provides the services producer

A person who purchases a product or service consumer

come from nature; they are part of the natural environment and include water, trees, and minerals. natural resource

the people who produce goods or provide services. human resource

the money or property—factories, tools, bridges, machines, and other items—used to produce goods and services. capital resource

Any resource may at times be limited. As a result, the limited resource affects what and how much of a product can be produced scarcity

occurs when you give up one thing in order to achieve a more desirable outcome. trade-off is something like a compromise. trade-off

the quantity of a good or service offered for sale. Producers regulate supply by deciding how much of a good or service to offer for sale. supply

the quantity of a good or service consumers are willing and able to buy. demand

the amount left after costs are subtracted from the price. profit

customs, habits, and beliefs determine how the four basic economic questions are answered traditional economy

the government controls the economy and answers the four basic economic questions. command economy

individuals answer the four basic economic questions based on supply and demand. This economic system is also known as free enterprise. market economy

they cannot be replaced by nature once they are used nonrenewable resource

they can replace themselves over time renewable resource

are nonrenewable, inorganic substances that were formed by Earth’s geological processes. Coal, salt, oil, natural gas, and sand/gravel and stone mineral resources

solid masses of salt found deep below Earth’s surface. rock salt

a mixture of salt and water brine

are plants and animals, also called flora and fauna, respectively. Biological resources differ from mineral resources in that they are renewable and can replenish themselves over time. biological resources

refers to the manufacture, production, and sale of goods. industry

the careful management of a natural resource to prevent its destruction conservation

they raised only enough crops to feed their families subsistence farmer

crops produced for resale and not for family use. The first cash crops were tobacco, corn, and fruit cash crop

soft coal, best used for making steel bituminous

any material that is processed to make another product raw material

business or trade between states interstate commerce