| A | B |
|---|
| economics | the study of how people choose to use scarce resources to satisfy their wants. |
| economize | choosing what is beleieved to be the best combination of costs and benefits |
| incentive | a benefit offered to encourage people to act a certain way. |
| economic system | way in which society uses it's resources to satisfy the people's wants. |
| goods | things you can buy |
| services | work that you can buy. |
| scarcity | lack of enough resources to satisfy your wants. |
| 4 factors of production | land, labor, entrepenuership, capital |
| labor | all time, effort, and talent that goes into the production of goods. |
| entrepenuership | rare combination of vision, ingenuity, energy, and a willingness to take risk that is needed. |
| oppotunity cost | value of the next best alternative that you did not choose. |
| macroeconomics | study of the behavior of the economy as a whole. |
| microeconomics | the study of specific factors in the economy |
| postitive economics | Study of the way that the economy is. |
| normative economics | focuses, not on what the economy is, but what it should be. |
| economic model | simplified representative of a complex activity, system, or problem. |
| production possibilities curve | model used by economists to illustrate the impact of scarcity on the economy. |
| utility | the satisfaction derived from the use of a good or service. |
| total utility | maximum satisfaction you can get from the alternative. |
| marginal utility | the additional benefit derived from sonsuming a successive amount of something in a given time. |
| Law of Diminished Marginal Utility | The marginal benefit from using each unit of something during a given period of time will tend to decline as each is used. |
| value | the measure of worth, or what people ar willing to give up to get that item. |
| voluntary trade | trade in which traders anticipate that the benefits will exceed the costs. |
| fair trade | Any voluntary exchange from which both parties anticipate gains. |
| involuntary exchange | when force or coercion is used by one side in a trade. |
