1. 1.01 Terms Principles of Business

2. Terms Capital resources-Goods and money used in the production of goods and services Capital resources-Goods and money used in the production of goods and services Command economy-Economics system in which the government owns resources and dictates what is produced Command economy-Economics system in which the government owns resources and dictates what is produced Competitors-Businesses that offer the same goods to the same customers Competitors-Businesses that offer the same goods to the same customers Consumer-Buys and uses the goods and services Consumer-Buys and uses the goods and services

3. Terms Economic decision-making-Process of choosing which needs or wants will be satisfied Economic decision-making-Process of choosing which needs or wants will be satisfied Economic resources-Means from which goods and services are produced Economic resources-Means from which goods and services are produced Economics-Study of the decisions made for production, distribution, and consumption of goods and services to satisfy needs and wants Economics-Study of the decisions made for production, distribution, and consumption of goods and services to satisfy needs and wants Entrepreneurial resources-The initiative to combine natural, human, and capital resources Entrepreneurial resources-The initiative to combine natural, human, and capital resources

4. Terms Free enterprise-Economic system which freedom to consume and produce goods and services exists Free enterprise-Economic system which freedom to consume and produce goods and services exists Freedom of choice-Opportunity to make choices of goods and services and accept consequences of decisions Freedom of choice-Opportunity to make choices of goods and services and accept consequences of decisions Goods-Items purchased to satisfy needs and wants Goods-Items purchased to satisfy needs and wants Human resources-People using efforts, knowledge, and skills at work to produce goods and services Human resources-People using efforts, knowledge, and skills at work to produce goods and services

5. Terms Market economy-Goods and services are owned and controlled by the people Market economy-Goods and services are owned and controlled by the people Market price-The point where supply and demand are equal. Market price-The point where supply and demand are equal. Marketplace-Anywhere goods and services exchange hands Marketplace-Anywhere goods and services exchange hands Mixed economy-Combines elements of the command and market economies Mixed economy-Combines elements of the command and market economies

6. Terms Natural resources-Raw materials supplied by nature Natural resources-Raw materials supplied by nature Needs-Necessities required for living Needs-Necessities required for living Opportunity cost-Value of the next-best alternative that is forgone to produce or obtain another product Opportunity cost-Value of the next-best alternative that is forgone to produce or obtain another product Private property-Right to purchase, use, and discard of things of value Private property-Right to purchase, use, and discard of things of value

7. Terms Producers-Individuals and organizations that determine which goods and services will be available for consumption Producers-Individuals and organizations that determine which goods and services will be available for consumption Profit-Money left after selling goods and services and costs of operating a business have been paid Profit-Money left after selling goods and services and costs of operating a business have been paid Scarcity-Condition that exists when wants or needs exceed resources available Scarcity-Condition that exists when wants or needs exceed resources available Services-Activities that can be consumed at the time of purchase to satisfy needs and wants Services-Activities that can be consumed at the time of purchase to satisfy needs and wants

8. Terms Tradeoff-Process of giving up something for gaining something else Tradeoff-Process of giving up something for gaining something else Traditional economy-Economic system in which decisions are based on customs and centered on family Traditional economy-Economic system in which decisions are based on customs and centered on family Wants-Goods that are purchased to add comfort or pleasure to life Wants-Goods that are purchased to add comfort or pleasure to life