Economics

economics - 1. the study of how individuals and nations make choices about ways to use scarce resources to fulfill their needs and wants 2. Social science that deals with the study of the production, consumption, distribution of goods and services and the transfer of wealth to obtain those goods and services. scarcity - a situation in which unlimited wants exceed the limited resources available to fulfill those wants trade-offs - giving up one thing in favor of another opportunity costs - the highest-valued alternative that must be forgone when a choice is made rational decisions - choice in which you weigh the costs and benefits of each option marginal benefit - the additional satisfaction or benefit received when one more unit is produced marginal cost - the cost of producing one more unit of a good. marginal benefit-marginal cost analysis - Rational decision making involves marginal benefits that equal or exceed the marginal costs resources - anything that is used to produce goods or services allocation of resources - decision on how to divide scarce resources among different uses goods - tangible products that we use to satisfy our wants and needs services - actions or activities that one person performs for another factors of production - land, labor, capital, entrepreneurship capital goods - Buildings, machines, technology, and tools needed to produce goods and services.