Search Council for Economic Education's full glossary for terms and definitions

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The difference between the value of output and the value of the intermediate goods used in the production of that output.

The ability of money to buy goods and services. A wide variety of items has been used as money. Money need not have any intrinsic value. It is people's willingness to accept it that gives it value.

Costs of production that change as a firm's output level changes.

Expenditures that change from week to week or month to month--for food, clothing, recreation and entertainment, for example.

Income that varies from week to week or month to month.

The average number of times each dollar is spent on final goods and services in a year.

A combination formed when two businesses, one of which supplies an ingredient of the other's product, merge.

Trading goods and services with other people because both parties expect to benefit from the trade.

Trading goods and services with other people because both parties expect to benefit from the trade.