Vocab 1 Flashcards
Scarcity
Limited amount of goods and services are available to meet unlimited wants
Wants
Something that we desire, but that is not necessary for survival
Needs
Something essential to survival
Consumer
A person who buys goods or services for personal use
Producer
A person who makes goods or provides services
Goods
Physical objects that someone produces
Services
Actions or activities, that one person performs for another
Trade off
The act of giving up one benefit in order to gain another greater benefit
Opportunity costs
The most desirable alternative somebody gives up as a result of a decision
Utility
Benefits or satisfaction gained from the use of a good or service
Marginal costs/benefits
The extra cost/benefits of adding one unit
Cost benefit analysis
The comparison of the opportunity costs and benefits
Traditional economy
An economy that relies on habit, customs, or ritual to answer of the three basic economic questions
Command economy
An economy that opposes private property, free market pricing, competition, and consumer choice
Market economy
An economy that answers the three basic economic questions through the voluntary exchange in Markets
