Civics Today Ch. 18 & 19, Pt. 1
Terms
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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