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-describes how society chooses from among scarce resources

Economic Systems

-How every society answers these questions:
1.What is going to be produced?
2. How to produce them?
3. Whom will get what is produced?


-What you have to give up


-What you get because of a decision

Factors of Production

-Land, labor, capital, and entrepreneurship are examples


-A person who assumes risk in the market place


-The result of human wants exceeding our resources

Profit Motive

-The gain received because of an action or a decision; can be monetary or non-monetary

Sunk Cost

-where you put effort into something then it turns out to be worthless


-The return on land or property

Capital Goods

-Machinery and tools are examples of this


-Another word for satisfaction or enjoyment

Opportunity Cost

-What you give up to get something else


-the effort of the people to the production of goods and services

Trade Off

-Exchanging the benefit of one choice with a more favorable benefit of another

Production Possibilities Frontier

-Shows the decision between two choices where buyers and sellers interact

Law of Diminishing Marginal Utility

-Each unit brings less enjoyment


-next; next best____

Cost Benefit Analysis

-Examining the positive results and what is lost with each decision

Unintended Consequences

-The unexpected and unplanned results of a decision or action

Human Resources

-Skills and knowledge acquired through experience and/or decision

Natural Resources

-Referred to as "gifts of nature" that exist without human intervention

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