1. Standard of Living The quality of life based on the possession of needs and wants that make life easier.

2. Scarcity This occurs when society does not have enough resources to produce the things people would like to have. This sometimes comes at an opportunity cost.

3. Trade Off The alternatives you face when trying to make a decision.

4. Opportunity Cost The value of what you gave up when you have made a decision.

5. Factors of Production Land - Natural resources, gifts of nature Capital – tools, equipment, machines, factories, etc. Labor – workforce Entrepreneur – risk taker that starts the business