Unit 1 Vocabulary

a visual representation showing the relationship between the factor market and the product market

• competition

• incentives

• factors of production

• circular flow model

economic system characterized by private ownership of businesses operated for profit with economic freedom for both consumers and producers

• circular flow model

• free enterprise system

• economic system

• factors of production

supplies of something of value

• scarcity

• resources

• communism

• incentives

condition in which there are not enough resources available to produce everything that individuals demand

• competition

• choice

• consumers

• scarcity

Using fewer resources than the economy is capable of using.

• scarcity

• competition

• producers

• Underutilization

the value of goods and services that are given up in order to obtain an alternative good or service

• choice

• competition

• opportunity cost

• incentives

a person who purchases goods and services for personal use.

• competition

• incentives

• consumers

• producers

the resources needed to produce goods and services, including land, labor, capital, and entrepreneurship

• factors of production

• circular flow model

• opportunity cost

• consumers

organizations or businesses.

• capitalism

• communism

• firms

• socialism

an act of selecting or making a decision when faced with two or more possibilities.

• choice

• competition

• incentives

• producers