Economics Terms
What is the definition of economics?
1) The study of individual and societal choices
2) The field concerned with the production, consumption, and distribution of wealth and resources
What is an opportunity cost?
The value of the most desirable alternative that you give up when you take an action
What is scarcity?
The gap between the limited number of resources and theoretically unlimited demand
What is a trade-off?
An advantage/profit gained from something, especially when choosing between two comparable options
What is microecomics?
The part of the economy concerned with single factors and the effects of individual choices
What is rationality?
The principle that people make decisions in logical, unemotional ways
What is macroeconomics?
The study of entire economies and large economic factors
What is self-interest?
The assumption that people act in an economically rational way, decreasing costs and increasing benefits for themselves
What is a monetary cost?
The money/resources lost when purchasing something
What is the 50/30/20 method?
A budgeting strategy: 50% needs, 30% wants, 20% savings