Economics

What is economics?

Economics is the science of production and trade under a division of labor (market) society.

What is production?

Production is the act of creating — shaping materials into values –– goods and services for future consumption.

What is trade?

Trade is the act of voluntarily exchanging one value for another. (Theft is when the value is exchanged involuntarily).

What is barter?

Barter is where a good/service is exchanged directly for another good/service for consumption, i.e., not for further trade.

What is a price?

The price of a good or service are the values it is exchanged for.

What is money?

Money is an asset used in a division of labor society as a medium for indirect exchange.

What is a market?

A market is where buyers (sellers) freely compete with other buyers (sellers) to trade money (goods/services) with other sellers (buyers).

What is market competition?

Market competition between sellers for buyer’s money, and between buyers for seller’s goods/services results in cooperation between buyers and sellers when a trade is made.

What is a business?

A business (enterprise) is an organization that creates products/services to sell on the market with the goal of making a profit for its owners.

What are savings?

The profits from the business can be either spent on consumption or saved and reinvested. Savings is wealth that is not consumed.

What is capital?

Capital is savings from production reinvested in an industry to produce wealth.

What is a capitalist?

A capitalist is someone who invests capital in a business concern in the hopes of earning a profit.

What is a corporation?

A corporation (trust) is a business operates under a condition of limited liability in regard to its shareholders.