| A | B |
|---|
| trade-off | alternative choice |
| opportunity cost | the value of the next best alternative that you give up |
| production possibilities frontier | diagram representing the various combinations of goods and services an economy can produce when ALL its resources are in use |
| economic model | a simplified equation, graph, or figure showing how something works |
| cost-benefit analysis | a way of comparing the cost of an action to the benefits received (ie. If you like A and B equally but A costs less then A is your best choice.) |
| free enterprise economy | one in which consumers and privately owned businesses, instead of the gov’t, make the majority of WHAT, HOW, and FOR WHOM decisions |
| standard of living | - the quality of life based on the ownership of necessities and luxuries that make life easier |
| idle resources | those resources not being fully used |
