Unit 1: An Economic Way of Thinking Vocabulary Frontload Ms. Ramos Alta Loma High School

Economics Study of how ppl choose to use their lmtd resources to satisfy unlimited wants Illustration

Economy System to manage lmtd resources for production, distribution, & consumption of G&S

Illustration Positive Economics Econ that uses obj analysis to find out how the world works. Goal: advise how things ought to be done Goal: describe how things are.

Illustration Normative Economics Econ that applies judgment to data to recommend actions or policies Goal: advise how things ought to be done Goal: describe how things are.

Illustration Scarcity Condition resulting from lmtd resources but unlmtd wants

Illustration Tradeoff Exchange of one benefit/adv for a perceived better option

Illustration Cost-Benefit Analysis Way to compare costs of an action w/benefits of action. If benefit exceeds costs- it is worth taking

Illustration Incentive Factor that encourages/ motivates one to do something taxes, prices, laws

Illustration Market Any arrangement bringing sellers & buyers to do business Flea mkt eBay Victoria Gardens

Illustration Resource Anything used to produce a good or service workers minerals machines

Illustration Want Something desired

Illustration Marginal Cost What you give up to add one unit to an activity