+

Economy of Michigan

Book 2

+scarcity

Not enough of something so people have to make choices.

Example: You don’t have enough money for shoes and a video game, you have to choose 1.

+Limited resources

There are only certain amounts of resources.

Human, natural and capital.

We don’t have an unlimited supply.

+Unlimited wants

There is no end to the number of things people want and need.

We all want more than we have or get.

+Opportunity cost

When you make a choice, your opportunity cost is the thing you gave up.

You also really want the thing you give up.

+Incentive

Something used to get people to buy or produce a certain good or service.

Examples: Sales, rebates, prizes

+Economic activities

Different ways people use resources to produce goods and services

Examples: farming, mining

+Manufacturing

The making of goods in a factory

Example: making cars

+Agriculture

Another word for farming

Raising corn, wheat, soy beans, asparagus

+Tourism

An economic activity in which tourists visit an area and spend money

Tourism is an important economic activity in Michigan

+Tourist

A person who goes sightseeing and spends money in a place away from where he or she lives.

Tourists visit our State Parks

+Research and development

An economic activity where people produce ideas that lead to new or improved goods or services

Research and development businesses often are located near universities and colleges

+

+Specialization

When an individual, region or country produces certain kinds of goods or services.

Cherries in MI

Asparagus in Oceana County

Specialization results in people producing fewer goods and services than they consume.

+Trade

To exchange one thing for another.

People trade money for goods or services

+Interdependence

When people are dependent on other people in order to get the things they do not produce.

When people specialize, they become more interdependent

+Export

A good that people in one place send out to people in another place when they trade

Cars are an important Michigan export

+Import

A good that people from one place bring in from another place when they trade

Bananas are a Michigan import

+Public goods and services

Goods and services that are provided by a government

Examples: State parks, state police, state highways

+Fees

Something people pay to a government for being able to do a certain activity

Camping fee at state park

Fishing license fee

Drivers license fee

+license

A legal document giving you permission to do something

Drivers license

+Fines

What people pay to the government for breaking a rule or law

Littering

Loitering

Speeding

Paying taxes late

+Taxes

What people pay to the government in exchange for services like public schools and road repair

Sales tax

Income tax

Property tax