| A | B |
|---|
| Scarcity | the 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 services. Types of resources are natural, human, capital, and entrepreneurship |
| Choice | selecting an item or action from a set of possible alternatives. Individuals must choose/make decisions about desired goods and services because these goods and services are limited. |
| Opportunity cost | what is given up when a choice is made—the highest valued alternative forgone. Individuals must consider the value of what is given up when making a choice. |
| Price | amount of money exchanged for a good or service. Interaction of supply and demand determines price. Price determines who acquires goods and services. |
| Incentives | things that incite or motivate. Incentives are used to change economic behavior. |
| Demand | the amount of a good or service that consumers are willing and able to buy at a certain price |
| Supply | amount of a good or service that producers are willing and able to sell at a certain price |
| Production | combining of human, natural, capital, and entrepreneurship resources to make goods or provide services. Resources available and consumer preferences determine what is produced |
| Consumption | using goods and services. Consumer preferences and price determine what is purchased. |
