- Scarcity: Limited resources vs. unlimited wants.
- Microeconomics vs Macroeconomics: Micro studies individual units; macro studies the economy as a whole.
- Four Factors of Production: 1. Land, 2. Labor, 3. Capital, 4. Entrepreneurship.
- Trade-Offs: Giving up one thing to gain another.
- Opportunity Cost: The value of the next best alternative forgone.
- Utility: Satisfaction or benefit derived from consuming a good or service.
- Marginal: Additional or incremental change.
- Allocate: To distribute resources among competing uses.
- Price: The amount of money required to purchase a good or service.
- Cost: The value of resources used to produce a good or service.
- Profit: Total revenue minus total cost.
- Consumer Goods: Goods purchased by households for personal use.
- Capital Goods: Goods used to produce other goods and services.
- Investment: Spending on capital goods to increase future production.
- Productivity: Output per unit of input.
- Production Possibilities Curve: A graph showing maximum combinations of two goods an economy can produce.
- Ceteris Paribus: Holding all other variables constant.
Parent Tip: Review the logic above to help your child master the concept of basic economic concepts worksheet.
