The basic language of economics

Scarcity

Resources are limited, but people's wants are essentially unlimited. This forces people to make choices.

Opportunity Cost

The value of the next best alternative that must be forgone when making a choice.

Trade-off

Giving up one thing to get another.

Marginal

The effect of one additional unit. Economists constantly think "one more."

Marginal Benefit

The additional satisfaction or value received from consuming one more unit of a good or service.

Marginal Cost

The cost incurred from producing one more unit of a good or service.

Marginal Analysis

Compare MB and MC. Generally, do more of something while MB > MC, and stop around MB = MC.

Incentive

Something that encourages or discourages a particular behavior.

Rational Choice

Choosing the option expected to provide the greatest net benefit, given available information and constraints.

Sunk Cost

A cost that has already occurred and cannot be recovered. It shouldn't affect current decisions.

Positive Economics

Statements about what is that can, in principle, be tested.

Normative Economics

Statements about what ought to be, involving value judgments.

Ceteris Paribus

Latin for "all else equal." Change one variable while assuming other relevant factors stay constant.