Ch. 18

Term Definition
need require or want something because it is essential or very important.
want have a desire to possess or do (something); wish for.
economics the branch of knowledge concerned with the production, consumption, and transfer of wealth.
microeconomics a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms
macroeconomics is a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole.
economic model is a theoretical construct representing economic processes by a set of variables and a set of logical and/or quantitative relationships between them
economic system system of production, resource allocation, and distribution of goods and services within a society or a given geographic area.
resource a stock or supply of money, materials, staff, and other assets that can be drawn on by a person or organization in order to function effectively.
scarcity The basic problem on which classical economic theory is built: simply, that human wants will always exceed the resources available to fulfill those wants
trade-off a balance achieved between two desirable but incompatible features; a compromise.
marginal cost the cost added by producing one additional unit of a product or service.
marginal benefit the additional satisfaction or utility that a person receives from consuming an additional unit of a good or service
cost-benefit analysis a systematic approach to estimating the strengths and weaknesses of alternatives (for example in transactions, activities, functional business requirements or projects
opportunity cost the loss of potential gain from other alternatives when one alternative is chosen.

Leave a Reply

Your email address will not be published. Required fields are marked *