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Unit 4: Economics Vocab

For this assignment, it is important that you demonstrate that you know each vocabulary term by
providing an example. Beside the first 12 vocab words is an empty box. Within the box, you are to either
draw a picture or write a sentence giving an example of that term. This assignment allows you the
opportunity to demonstrate your understanding in a different way and allows myself, as your teacher, to
see how classes may be struggling or understanding different vocabulary terms. If you have questions
please reach out.

1. Economics

the study of how people use resources to

produce, distribute and consume goods
and services

2. Consumption

the process of using natural resources or

goods and services

Example: The snowy winter resulted in

an increase in the consumption of snow
shovels and warm clothing.

3. Production

the process of making goods and services

Example: An assembly line is used in the

production of automobiles.
 4. Distribution

moving goods and services directly to or

near consumers

Example: Trucks, ships, and railroads are

used for the distribution of goods across
the United States.
5. Goods

Physical items you can buy to satisfy your

wants like clothing, food, toothpaste or
board games

6. Services

Actions someone performs for another for

pay such as haircuts, medical check-ups,
car repairs and mail delivery.

7. Natural (land) Resources

any physical environmental item that

people perceive to be useful

Example: Natural resources include

water, soil, trees, and minerals.
 8. Human (labor) Resources

workers and their abilities, talents,

training, skills, and knowledge used to
produce goods or services

Example: Human resources may refer to

physical or mental efforts

9. Capital Resources

equipment or goods (machinery, tools,

factories, stores, vehicles, etc.) that are
used to produce other goods and services

Example: Tractors used to harvest crops

are capital resources.

10. Factors of Production

The resources used to produce goods and

services

11. Supply

Refers to how much of a certain good or

service is available to be purchased
 12. Demand

refers to how much of a good or service

consumers are wanting to purchase

13. Command Economy 14. Market Economy

an economic system in which the three an economic system in which the three
main economic questions are answered by main economic questions are answered by
the government the interaction of buyers and sellers

Example: In a command economy, prices Example: In a market economy, prices

are set by the government. are set when sellers and buyers agree on
the price for a good or service.

15. Economic system 16. Mixed Economy

an organized way a society uses to a combination of command and market

produce, distribute, and consume goods economies
and services

Example: Most countries in the world

today have mixed economies.

17. Monopoly 18. Regulation

a situation in which one company controls a government rule with the force of law
an industry or is the only provider of a that states what may or may not be done or
product or service how something must be done

Example: The company had a monopoly Example: Many government regulations

on tires so it could set the prices high and are aimed at protecting the health and
did not have to worry about competition. safety of consumers.
 19. Gross Domestic Product
(GDP)
the total value of all goods and services
produced in a country
Example: GDP is often used as a
measurement of economic development.
21. Import
bringing a product into a country to be
sold
Example: The United States imports
crude oil from many countries in western
Asia or the Middle East.
23. Specialization
a method of production where a country
focuses on the production of a limited
scope of products in order to gain greater
degrees of efficiency
Example: Specialization is the basis of
global trade.
25. Currency
money; a medium of exchange
Example: Each country has its own type
of currency.
20. Scarcity
To be in short supply, a shortage of a
certain good or service
22. Export
sending a product to another country for
sale
Example: The United States exports fruits
and vegetables to other countries.
24. Interdependence
the condition when countries are
dependent on each other for products they
cannot produce efficiently for themselves
26. Free Trade
unrestricted trade between nations
Example: Free trade occurs when
countries trade without taxes, limits or
punishments.
 27. Tariff 28. Embargo

a tax on imported goods a trade restriction that prevents a country

from trading with another

Example: A tariff of 10% means Example: The U.S. has had a trade
someone importing an $100 item must pay embargo against Cuba for many years.
an additional $10 to the government

29. Sanction 30. North American Free Trade

a penalty levied on another country
Example: An economic sanction was
placed on Iran because of its development
of a nuclear industry.
Agreement (NAFTA)
an agreement between Canada, Mexico
and the U.S. to promote unrestricted trade
among these countries
Example: NAFTA has resulted in freer
trade among Canada, the U.S. and Mexico