| A | B |
|---|
| Trade off | Making a choice to give up all or part of another alternative |
| demand | refers to how much (quantity) of a product is desired by buyers |
| economics | the study of how individuals and societies make decisions about production and consumption of goods and services |
| Positive Incentive | Reward that encourages a behavior (profits, coupons, wages, good grades, chore allowances) |
| Negative Incentive | Penalty that discourages behavior (fines, parking ticket, tardy table, being grounded |
| factors of production | the human, natural, and capital resources used to produce things we consume |
| goods | physical (tangible) items produced for sale to consumers |
| incentives | an action or reward that motivates someone to act a certain way |
| inflation | an increase in the overall level of prices for goods |
| marginal benefit | the satisfaction that one recieves from purchasing or consuming one more unit of a good or service |
| marginal cost | the additional effort or price of consuming or using one more unity of a good or service |
| needs | things that you must have to survive |
| opportunity costs | the benefits you could have received by performing an alternative acton to the one you chose to do |
| PACED-Decision Making | Problem, Alternatives, Criteria, Evaluate, Decision |
| Market Economy | Consumers decide what to produce, Producers Choose most profitable methond of production; Goods and services are consumed by willingness to pay, Scarce goods and services are allocated by influence of prices based on supply & demand |
| scarcity | a shortness of supply; not enough of something to satisfy everyone's wants and needs |
| Law of Demand | People will buy more of a good or service at lower prices and less at higher prices IF: Demand>Supply, THEN Shortages & Higher Prices |
| Law of Supply | Produces will increase supplies at higher prices and decrease quantity supplied at lower price: IF Supply>Demand, THEN Surpluses & Lower Prices |
| wants | things you would like to have but can live without |
| Natural Disasters | Unexpected events such as tornados and hurricanes can increase demand for a product no matter what the price. Eg. Bottled water, ice, generators |
