| A | B |
|---|
| choice | the condition that arises from unlimited wants and limited resources |
| decision | a conclusion reached after considering alternatives and their results. |
| resources | things that we have that are in limited supply and which may include personal resources (financial, skill time) or productive resources (human, natural, capital, entrepreneurial) |
| scarcity | condition of not being able to have all the goods and services one wants. |
| wants | desires that can be satisfied by consuming or using a good or service. |
| opportunity cost | the 2nd-best alternative that must be given up when making a choice. |
| trade-off | the giving up of one benefit or advantage in order to gain another regarded as more favorable. |
| PACED decision making | a process designed to help people solve problems in a rational, systematic way. |
| benefits | monetary or non-monetary gain received because of an action taken or a decision made; what satisfies your wants. |
| costs | what must be given up to obtain something; the effort, loss or sacrifice necessary to achieve or obtain something. |
| cost-benefit analysis | a process of examining the benefits and costs of each available alternative in arriving at a decision. |
| diminishing marginal utility | relationship in which the additional satisfaction associated with consuming additional units of the same product in a given amount of time eventually declines. |
| marginal analysis | a decision-making tool for comparing the additional or marginal benefits of a course of action to the additional or marginal costs. |
| marginal benefit | the additional gain from consuming or producing one more unit of a good or service; can be measured in dollars or satisfaction; the benefit gained by consuming one more of something. |
| marginal cost | the increase in a producer's total cost when it increases its output by one unit; the cost incurred by consuming one more of something; the change in total cost resulting from an action. |
| unintended consequences | the unexpected and unplanned results of a decision or action. |
| factors of production | productive resources used to produce goods and services (natural, capital, human, entrepreneurial) |
| natural resources | "gifts of nature" and exist without human intervention |
| human resources | effort of people in producing goods and services |
| capital resources | physical (manmade goods) and human (skills and knowledge of a person) |
| entrepreneurs | risk-takers; bring resources together to develop new products/start new businesses; expect to earn a profit. |
