Economics: Social Studies Terms Explained
Plain-language definitions of every economics term your child meets in school, each with kid-friendly explanations, worked examples, and common mistakes to watch for.
Market
A market is any place, system, or situation where buyers and sellers come together to exchange goods, services, or resources, usually using money and prices to guide their decisions.
Market economy
A market economy is an economic system where most decisions about what to produce, how to produce it, and who gets it are made by individuals and businesses through buying and selling, rather than by the government.
Mixed economy
A mixed economy is an economic system that combines private businesses and markets with government involvement, so both individuals and the government help decide what is produced, how it is produced, and who gets it.
Monopoly
A monopoly is a situation where one company or seller controls all or almost all of the supply of a product or service, so buyers have little or no choice and the company can strongly influence price.
Opportunity cost
Opportunity cost is the value of the next best thing you give up when you choose one option instead of another.
Price
A price is the amount of money people agree to pay to buy a good or service, usually shown as how many dollars or other currency units are needed for one item.
Profit
Profit is the money a person or business has left after paying all the costs of making and selling a good or service.
Public goods
Public goods are goods or services that everyone can use without reducing how much others can use, and that people generally cannot be kept from using, such as clean air, national defense, or a city park.
Recession
A recession is a period of significant decline in a country’s economic activity, usually lasting at least several months, when production, income, spending, and employment all fall or grow much more slowly than normal.
Revenue
Revenue is the total amount of money a person, business, or organization earns from selling goods or services before paying any costs or expenses.
Scarcity
Scarcity is the basic economic idea that there are not enough resources, goods, or services to give everyone everything they want, so people and societies must make choices about how to use what they have.
Specialization
Specialization is when a person, business, or place focuses on doing one type of job or making one kind of product very well, instead of trying to do everything.
Stock market
The stock market is a system where people buy and sell small ownership shares of companies, called stocks, and where prices change based on what buyers and sellers think those companies are worth.
Supply and demand
Supply and demand is a basic idea in economics that explains how much of something people are willing to sell, how much people want to buy, and how these two forces work together to help set prices in a market.
Every term here links to practice activities. Create an account to get started with your child.
Get Started Free