| A | B |
|---|
| Scarcity | inability to satisfy all wants at the same time. All resources and goods are limited. This requires that choices be made. |
| Resources | factors of production that are used in the production of goods and service. Types include natural, human, capital, and entrepreneurship |
| Choice | selection of an item or action from a set of possible alternatives. People have to do this because goods and services are limited. |
| Opportunity cost | what is given up when a choice is made | the highest valued alternative is forgone. |
| Price | amount of money exchanged for a good or service. Interaction of supply and demand determines this. This determines who acquires goods and services. |
| Incentives | things that incite or motivate. These are used to change economic behavior. |
| Supply and Demand | Interaction of these two determines price |
| Demand | is the amount of a good or service that consumers are willing and able to buy at a certain price. |
| Supply | is the amount of a good or service that producers are willing and able to sell at a certain price. |
| Production | is the combining of human, natural, capital, and entrepreneurship resources to make goods or provide services. Resources available and consumer preferences determine what is produced. |
| Consumption | is the using of goods and services. Consumer preferences and price determine what is purchased and consumed. |
