Economic Principles
A basic idea that people must give up something when they choose one thing over another."
What is a tradeoff
You choose to spend the evening watching a new TV series instead of completing a paid freelance gig that would pay $80. What is your opportunity cost?
$80
A common form students apply for to get federal student aid for college, which determines eligibility for grants and loans.
A plan that shows expected income and spending to help avoid overspending.
Budget
The condition that resources are limited but human wants are unlimited.
Scarcity
If you buy a $20 concert ticket instead of textbooks, this is the benefit you didn't get
Textbooks
A payment card that takes money directly from your bank account at the time of purchase.
Debit Card
Two common places people keep money: one is often used for daily payments, the other for longer-term savings
Checking and Savings
The reason people change their behavior when they are offered rewards or punishments.
Incentives
A farmer could earn $300 from corn or $250 from soybeans; this number is the profit foregone by choosing corn."
$250
A savings account to keep money safe for an emergency.
What is an emergency fund.
A number that summarizes a person's borrowing history and helps lenders decide loan terms.
Credit Score
An example: choosing between studying for an exam or going to a party; the enjoyment you miss by studying."
Opportunity Cost
You have a Saturday morning free and choose to attend a college visit instead of working a 4-hour shift that pays $12/hour. What is your opportunity cost?
$48
A tool people use to borrow money for purchases now and repay later; using it responsibly can help build a borrowing history, but unpaid balances can cost extra in fees and charges.
Credit Card
Two ways to lower monthly expenses
Any
The extra satisfaction you get from one more unit of something, like the enjoyment from one more slice of pizza.
Marginal Utility/ Marginal Benefit
If you spend 2 hours and $30 at a concert instead of working a $15 an hour shift, your total opportunity cost is this.
$60
Found on your paystub, this 3 word term represents your total take home pay after all taxes and deductions have been subtracted.
Net
A regular monthly amount you agree to pay for a service (like streaming or a phone plan); cancelling unused ones can lower your monthly expenses."
Subscription