1. Definitions
1. Profit is the income that is left after costs and expenses are paid.
2. Expenses are those expenditures that are involved in running a business, such as wages, as well as those assets that get “used up” in the process, such as paper and toner
3. Costs are the amount of money required for each stage of production, such as the cost of raw materials. To be successful, a for-profit business must earn profit while keeping both expenses and costs down
4. Solvency means having the ability to pay your debts and meet financial obligations. But over time, a business’s failure to make a profit will eventually force an owner to close the operation
5. Goods are items that can be see and touched
6. Services are being assisted, usually in return for payment, that satisfies need and wants of people or business but that does not result in a product that can be touched
7. Marketplace can be any location where producers and consumers come together to engage in the buying or selling of goods and services
8. Obsolete is a product or service that consumers no longer wants because it has become outdated or outmoded or had been replaced by a new or improved product
9. Needs are items necessary for survival like food, water, shelter
10. Wants are items that are not necessary for survival but only adds pleasure and comfort to life
11. Economic resources are means through which goods and services are made available to consumers; natural resources, human resources, and capital resources are considered to be the three kinds of economic resources. Also known as factors of production
12. Natural resources are raw materials that we get from the earth, the water, and the air
13. Human resources are people who work to produce goods and services in a business; also known as workface or labour
14. Capital resources are resources such as equipment, a building, or money, that is used to produce goods and services
15. Interdependent is mutually dependent; relying on others who also rely on you
16. Demand is the quantity of a good or service that consumers are willing and able to buy
17. Law of Demand is the economic principle that demand goes up when prices come down, and comes down when prices go up
18. Supply is the quantity of a good or service that producers can provide, determined by the costs of producing it and by the price people are willing to pay for it
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