Economics: The study of how people seek to satisfy their needs and wants by making choices.
Scarcity: The principle that limited amounts of goods and services are available to meet unlimited wants.
Need: Something essential for survival such as food or clothing.
Want: Something that people desire but that is not necessary for survival.
Goods: The physical objects that people, businesses, or governments buy.
Services: The actions or activities that one person performs for another.
Resources: Anything that people use to make things or do work.
Shortage: A situation in which people want more of a good or service than producers are willing to supply at a particular price.
Entrepreneur: A person who decides how to combine resources to create goods and services
Factors of production: The resources that are used to make goods and services.
Land: All natural resources used to produce goods and services.
Labor: The effort people devote to tasks for which they are paid.
Capital: Any human-made resources used to produce goods and services.
Physical capital: The human made objects used to create other goods and services.
Human Capital: The knowledge and skills gained from education and experience.
Trade-off: The alternatives that we give up when we choose one course of action over another.
Guns or butter: The idea that a country that produces guns has fewer resources to produce butter and vice versa.
Opportunity cost: The most desirable alternative given up as the result of a decision.
Cost/benefit analysis: A process in which you compare what you will sacrifice and gain by a specific action.
Marginal cost: The extra cost of adding one unit.
Marginal benefit: The extra benefit of adding one unit.