allocation process of making choices of which need will be satisfied and how much out resources can be used to satisfy.
command economy (social economy) economy where the government determines the economic questions representing the interest of society.
competition rivalry between two or more individuals or groups to gain benefits from a third party (consumer).
economics the study of how society deals with the allocation of scarce resources to meet unlimited wants and needs.
exchange giving one thing in return for some other item.
invisible hand incentive that guides individuals to choose in the best interest of society by pursuing their own self-interest.
limited resources not enough resources to meet all the wants and needs of man.
macroeconomics the branch of study that examines the whole economy.
market exchange activities between buyers and sellers of goods and services.
market economy economy in which the economic questions are decided by individuals in the marketplace.
microeconomics the branch of study that examines the choices of individuals concerning one product, one firm, or one industry.
opportunity benefit value gained by making a certain choice.
opportunity cost value of any alternative that is given up when a choice is made.
private enterprise system where individuals take the risk of producing goods or services to make a profit.
private goods goods privately owned and use to benefit individual owners.
private sector part of an economy owned by individuals and operated for personal benefit.
profit the difference between the money received from the sale of a product and the cost of production.
public goods goods and services available to the whole society.
public sector part of an economy that is owned by the whole society and operated for the benefit of society.
scarcity limited resources meet unlimited wants and needs. Decisions must be made to determine what needs will be met with the resources.
unlimited wants and needs human characteristic of never having all wants and needs met.
This page last updated on 06/25/00.
Dr. Cynthia Sparks is the Supervisor of Social Studies for Chesapeake Public Schools. She is also an Adjunct Faculty member for the University of Virginia, Troy State University, and Old Dominion University.