Economics

Unit 1 Notes

Economics                     The study of people producing and exchanging to get goods and services they want

Economy                       The system that results from choices we make as consumers, workers, business owners, and government officials

Voluntary Exchange          Getting what you want in exchange for something they want

Market                          Arrangement where exchanges are allowed to happen

Scarcity                         Central economic problem facing all countries.  The inability to satisfy all wants due to lack of resources

Opportunity Cost:          The best alternative given up when making a choice.

Marginal Cost              Extra costs of the choice made

Marginal Benefits            Extra benefits of the choice made

Productive Resources          Capital, Human, and Natural

Law of increasing opportunity cost:  Obtaining more of a good in equal   amounts requires giving up even larger amounts of the alternative good.

 are increased or technology allows for their

Inside frontier: unemployed resources or resources used inefficiently

Expanding frontier: occurs when resources