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21 Cards in this Set

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Economics
The study of how individuals and nations make choices about ways to use scarce resources to fulfill their needs and wants
Wants
Things we would like to have, such as entertainment, vacations, and items that make life comfortable and enjoyable
Needs
Requirements for survival, such as food, clothing, and shelter
Scarcity
Not having enough resources to produce all of the things we would like to have
Economic Models
Simplified representation of the real world that economists develop to describe how the economy behaves and is expected to perform in the future
Trade-off
The alternative you face if you decide to do one thing rather than another
Opportunity Cost
The cost of the next best alternative use of time and money when choosing to do one thing rather than another
Fixed Costs
Costs that stay the same no matter how many units of a good are produced
Variable Costs
Expenses that change with the number of products produced
Total Costs
VC+FC= this
Marginal Costs
The additional or extra opportunity cost associated with an action
Rational Choice
Choosing the alternative that has the greatest value from among comparable-quality products
Macroeconomics
Division of econmics that deals with the big picture
Microeconomics
Division of economics where economists look at the small picture
Services
Work performed by a person for someone else
Goods
Tangible products that we use to satisfy our wants and needs
Factors of Production
Resources necessary to produce goods and services; Natural Resources, Labor, Capital, and Entrepreneurs
Natural Resources
Gifts of nature that make production possible
Marginal Revenue
The change or extra revenue that results from selling one more unit of output
Marginal Benefit
The additional or extra benefit associated with an action
Cost-Benefit Analysis
Economic model that compares the marginal costs and marginal benefits of a decision