AcDec Economics

The value of the next best alternative to the choice a person makes

Opportunity cost

The branch of economics that focuses on broad issues related to the overall economy

Macroeconomics

Money or physical assets

Capital

The difference between a person’s disposable income and their expenditures

savings

Choosing one thing over another

trade-off

The branch of economics that focuses on individual people, businesses, and specific sectors of the economy.

microeconomics

results from the fact that people have limitless wants but limited resources

scarcity

something that shows how the variables in an economy relate to each other

economic model

the buying and selling of goods and services

trade

the study of how individuals make choices about how to allocate scarce resources in order to satisfy virtually unlimited human wants

Economics

a situation in which the only way that anyone can be made better off is by reducing the well-being of one or more other people

Pareto Efficiency

spending by households on goods and services

consumption

A group of friends offer house painting services in their neighborhood. They share equally in the profits. No one can take a larger share of the profits without someone else getting less.

Pareto Efficiency

Mr. Fletcher’s class studies how people make choices to allocate limited resources to satisfy human wants.

economics

In Washington D.C., a group of representatives in Congress use a cost-benefit analysis to argue that new tariffs are bad for the economy.

normative economics

Cameron owns a lawn care business, while Asa is a mechanic who repairs small engines. When they exchange lawn care services for engine repair services, they are better off.

Gains from trade

Mr. Hunt is an economist who studies how inflation affects purchasing power.

macroeconomics

On Monday, Sarah spends $25 on dinner with friends. For the rest of the week, she packs her lunch instead of buying it at the local cafe.

trade-off

Miguel wants a cup of coffee before work, but the bus is about to arrive. He decides to buy coffee near his office. It will be more expensive than making coffee at home, but he won't be late for work.

rationality