Scarcity
the limited nature of society's resources, given society's unlimited wants and needs (page 6)
Economics
the study of how individuals and society allocate their limited resources to satisfy their unlimited wants (page 6)
microeconomics
the study of the individual units that make up the economy (page 7)
Marcoeconomics
the study of the overall aspects and workings of an economy (page 7)
Incentives
factors that motivate a person to exert effort (page 8)
opportunity cost
the highest-valued alternative that must be sacrificed to get something else (page 13)
Economic Thinking
the highest-valued alternative that must be sacrificed to get something else (page 13)
marginal thinking
the evaluation of whether the benefit of one more unit of something is greater than its cost (page 15)
Markets
systems that bring buyers and sellers together to exchange goods and services (page 17)
Barter
involves individuals trading a good they already have or providing a service in exchange for something they want. (page 17)
Trade
the voluntary exchange of goods and services between two or more parties (page 19)
Comparative Advantage
the situation where an individual, business, or country can produce at a lower opportunity cost than a competitor can (page 19)