Civics and Economics Chapter 18: What Is Economics?

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need

requirement for survival, such as food, clothing, and shelter

want

a thing we would like to have, such as entertainment, vacation, or an item, that makes life comfortable and enjoyable

economics

the study of how individuals and nations make choices about ways to use scarce resources to fulfill their needs and wants

microeconomics

the economic behavior and decision-making by individuals and small businesses

macroeconomics

economic behavior and decision-making by government or whole industries or societies

economic model

simplified representation of the real world that economists develop to describe how the economy behaves and is expected to perform in the future

economic system

nations way of producing things its people want and need

resource

the money, people, and materials available to accomplish a communitys goals

scarcity

not having enough resources to produce all of the things we would like to have

trade-off

the alternative you face if you decide to do one thing rather than another

opportunity cost

the cost of the next best use of time and money when choosing to do one thing or another

marginal cost

the additional or extra opportunity cost associated with an action

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

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