Source: Kaplan GED Test Prep 2022–2023 by Caren Van Slyke Authority Tier: Commercial Preparation (
TIER_3_COMMERCIAL) | License: Restricted Reference (RESTRICTED) Coverage: Chapter 4: Economics (Pages 1030–1044) Curriculum Standard: High School Equivalency Preparation
Kaplan Reference: Chapter 4: Economics
Lesson 1: Basic Economics Concepts
(Page 1030)
CHAPTER 4 Economics Lesson 1: Basic Economics Concepts Key Ideas Businesses utilize capital, labor, and materials to create goods and services to sell. Markets are systems that bring sellers’ goods and services to buyers. The prices of goods and services are determined in part by supply and demand. In economics, capital is a term for things that can produce income. Money can be capital; so can equipment, land, and buildings. Businesses invest capital in order to create goods and services to sell for profit. However, capital by itself cannot create value. Labor , the work of human beings, transforms capital and materials into goods and services that can be sold. For example, a business that makes computers must make capital investments to build a factory and install equipment for production . Then the business must hire workers and managers to run the plant and use the equipment. The