Economics Study Guide

Economics Study Guide
Test on Thursday, March 17th
Needs: things we must have in order to live (food
and clothing
Wants: things we would like to have but don’t need to survive
(everything that is not a need)
Goods: things you can buy that you can touch
Services: something somebody does for you
Producer: a person who makes a good or provides a service
Consumer: a person who uses or buys a good or service
Natural Resources: things that come from nature (water, soil, plants,
Capital Resources: things that are used to make goods or provide
services (machines, tools, buildings)
Human Resources: people working to make a good or provide a
Money: coins, paper bills, checks, and credit cards used in
exchange for goods and services
Cash: coins and paper bills; easy to use for inexpensive items. There is no
way to replace cash if it is lost.
Checks: a piece of paper that represents coins and paper bills. You have
to have money in the bank to use them. You have a record of how you
spent your money.
Credit Cards: You can “buy now” and “pay later”. If you do not pay your
bill in full, you will have to pay interest each month.
Savings Account: an account where the bank keeps your money until you
need it. If you leave it in the bank for a long time, you earn interest and
your money grows in value.
Bartering: trading goods or services without using money
Scarcity: This happens when you do not have enough resources; you
don’t have enough money to meet all of your wants; you have to
make choices about how to spend your money because you don’t
have enough money.
You should know:
~ how to distinguish between needs and wants
~ if someone is providing a good or a service and
how to exchange them
~ if a resource is natural, capital, or human
~ how scarcity affects our spending choices