Chapter 1 and 2 Econ Review

A way to compare costs of an action with the benefits of that action

The branch of economics that uses objective analysis to find out how the world works. 

The value of the next best alternative that is given up when making a choice. EX: Sleep/Work

The tools, machines, and buildings used to produce goods and services are called

Any factor that encourages or motivates a person to do something

Work done by someone else for which a consumer, business, or government is willing to pay

Physical articles that have been produced for sale or use: food, clothing, and cars.

The study of how people choose their limited resources to satisfy their unlimited wants

System used to manage limited resources for the production, distribution, and consumption

Father of Economics, Invisible hand, supply and demand, free markets

A measure of the efficiency with which goods and services are produced 

A simple model of an economy that shows all the combinations of two goods that can be produced

The branch of economics that applies value judgments to data in order to recommend actions

The resources used to produce goods and services. Resources such as land, labor, and capital

The exchange of one benefit or advantage for another that is thought to be better is called a

The marginal product of an input gets smaller as one uses more of that input, ceteris paribus.

The condition that results because people have limited resources but unlimited wants is called

The willingness and ability to take the risks involved in starting and managing business