Civics Ch. 18 Test What Is Economics

What is Economics

• simplified representations of the real world that's used to show how the economy works, or to predict what might happen if something in the economy should change

• things such as entertainment, vacations, and other resources to produce all of the things we would like to have

• the study of how we make decisions in a world where resources are limited

• things such as food, clothing, and shelter

What are Needs

• things such as entertainment, vacations, and other resources to produce all the things we would like to have

• the study of how we make decisions in a world where resources are limited

• things such as food, clothing, and shelter

• the study of how we make decisions in a world where resources are limited

What are Wants

• things such as food, clothing, and shelter

• things such as entertainment, vacations, and other resources to produce all the things we would like to have

• simplified representations of the real world that's used to show how the economy works, or to predict what might happen if something in the economy should change

• the study of how we make decisions in a world where resources are limited

What is Scarcity

• occurs when we don't have enough resources to produce all the things we want

• the study of how we make decisions in a world where resources are limited

• things such as entertainment, vacations, and other resources to produce all the things we would like to have

• things such as food, clothing, and shelter

What is an Economic Model

• things such as food, clothing, and shelter

• occurs when we don't have enough resources to produce all the things we want

• the study of how we make decisions in a world where resources are limited

• simplified representations of the real world that's used to show how the economy works, or to predict what might happen if something in the economy should change

What is a Trade Off

• Cost of the next best use of your time or money when you choose to do one thing over another

• The additional benefit associated with an action

• Requires you to compare the marginal costs and marginal benefits of a decision

• An alternative you face to decide to do one thing rather than another

What is Opportunity Cost

• Cost of the next best use of your time or money when you choose to do one thing over another

• The extra, or additional cost of producing one additional unit of output

• Requires you to compare the marginal costs and marginal benefits of a decision

• The additional benefit associated with an action

What is Marginal Cost

• Requires you to compare the marginal costs and marginal benefits of a decision

• The extra, or additional cost of producing one additional unit of output

• An alternative you face to decide to do one thing rather than another

• The additional benefit associated with an action

What is Marginal Benefit

• Requires you to compare the marginal costs and marginal benefits of a decision

• Cost of the next best use of your time or money when you choose to do one thing over another

• An alternative you face to decide to do one thing rather than another

• The additional benefit associated with an action

What is Cost Benefit Analysis

• An alternative you face to decide to do one thing rather than another

• The extra, or additional cost of producing one additional unit of output

• Requires you to compare the marginal costs and marginal benefits of a decision

• Cost of the next best use of your time or money when you choose to do one thing over another