Need - Something essential for survival, Want - Something that people desire but that is not necessary for survival, Good - The physical objects that someone produces, Services - The actions or activities that one person performs for another, Scarcity - The principle that limited amounts of goods and services are available to meet unlimited wants, Economics - The study of how people seek to satisfy their needs and wants by making choices, Shortage - A situation in which consumers want more of a good or service than producers are willing to make available at a particular price, Entrepreneur - A person who decides how to combine resources to create goods and services, Factors of production - The resources that are used to make goods and services, Land - All natural resources used to produce goods and services, Labor - The effort people devote to tasks for which they are paid, Capital - Any human-made resource that is used to produce other goods and services, Physical capital - The human-made objects used to create other goods and services, Human capital - The knowledge and skills a worker gains through education and experience, Trade-off - The alternatives that we give up when we choose one course of action over another, Guns or butter - A phrase expressing the idea that a country that decides to produce more military goods has fewer resources to produce consumer goods and vice versa, Opportunity cost - The most desirable alternative given up as the result of a decision, Thinking at the margin - The process of deciding how much more of less to do, Cost/benefit analysis - A decision-making process in which you compare what you will sacrifice and gain by a specific action, Marginal cost - The cost of producing one more unit of a good, Marginal benefit - The extra benefit of adding one more unit,

Econ-Unit 1

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