Economics, A social science that studies the allocation of scarce resources among unlimited human wants., Model, A simplified description of reality used to illustrate complex economic processes and principles., Assumption, A fact that we accept as given when building an economic model; we do not question it as part of the model., Ceteris Paribus, The principle meaning "all other things being equal"; other variables are held constant when testing cause and effect., Positive Statement, An objective statement that can be tested and verified to determine whether it is true or false., Normative Statement, A subjective statement that expresses a value judgement about what ought to be; contains words like "should," "ought to," "right thing to do.", Scarcity, The fundamental economic problem: limited (scarce) resources exist alongside unlimited human wants., Unlimited Wants, Human desires and needs for goods and services that are endless and continuously growing., Limited Resources, The finite or restricted availability of resources (land, labour, capital, enterprise) needed to produce goods and services., Free Good, A good that is not scarce, is available without limits, and requires no resources to obtain; has no price (e.g. air, sunshine)., Economic Good, A good that satisfies human wants and requires limited resources to produce; is scarce and has a price in the market (e.g. food, cars, education)., Renewable Resources, Resources that can regenerate or be replenished naturally over time if managed sustainably (e.g. forests, fish stocks, water)., Non-renewable Resources, Resources that cannot be replenished once used; finite stocks that become depleted (e.g. oil, coal, minerals, metals)., Allocation, The distribution or rationing of scarce resources between competing alternative uses to satisfy wants.

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