Vocabulary
Goods
Tangible objects that satisfy economic wants
Services
Activities performed by people, firms or government agencies to satisfy economic wants.
Scarcity
The condition that exists because human wants exceed the capacity of available resources to satisfy those wants; also a situation in which a resource has more than one valuable use. The problem of scarcity faces all individuals and organizations, including firms and government agencies.
Choice
Decision made or course of action taken when faced with a set of alternatives.
Marginal Analysis
A decision-making tool for comparing the additional or marginal benefits of a course of action to the additional or marginal costs.
Marginal Benefits
The additional gain from consuming or producing one more unit of a good or service; can be measured in dollars or satisfaction.
Marginal Costs
The increase in a producer's total cost when it increases its output by one unit.