Chapter 1 Review

Information in numerical form ▫Statistics Make a decision according to the best combination of costs and benefits ▫Economize

The additional satisfaction from using one of more unit of a product ▫Marginal benefit Methods used to encourage people to take certain actions ▫Incentives

Things that is necessary for survival ▫Needs Producing fewer goods and services than possible ▫Underutilization

Studies economic behavior as it is ▫Positive economics Physical objects that can be purchased ▫Goods

The study of choices that people makes to satisfy their wants or needs ▫Economics The people who decide to buy things ▫Consumer

Actions or activities that are performed for a fee ▫Services Anything that people use to make or obtain what they need or want ▫Resources

The combination of organizational abilities and risk taking involved in starting a new business or introducing a new product ▫Entrepreneurship The most basic problem of economics that forces people to make decisions about how to use resources effectively ▫Scarcity

The sacrifice of one good in order to purchase or produce another ▫Trade Off The use of the smallest amount of resources to produce the greatest amount of output ▫Efficiency

The value of the next best alternative that is given up to obtain the preferred item ▫Opportunity Cost Resources that can be used to produce goods and services, land, labor, capital, and entrepreneurship ▫Factors of production

Shows all the possible combinations of two goods or services that can be produced within a stated time period ▫Production Possibilities Curve (PPC) The usefulness of a good or service that contributes to its value ▫Utility

Examines the behavior of entire economies ▫Macroeconomics Desires that can be satisfied by consuming a good or a service ▫Wants

Involves judgments of what economic behavior ought to be ▫Normative economics Methods used to encourage people to take certain actions ▫Incentives

An approach that weighs the benefits of an action against its cost ▫Cost-benefit analysis The additional cost of using one more unit of a product ▫Marginal cost

The people who make things that satisfy consumers' needs and wants ▫Producer