financial literacy - unit 1

needs

necessary for survival such as food, water, and healthcare

wants

you don’t necessarily need it

goods

things you own such as your schoolbag and car

services

a process or action that you pay for to achieve a financial goal or acquire a financial product; an example of this is getting your oil changed for your car

scarcity

there is not enough to go around for everyone

economics

how we distribute our scarce resource

entrepreneurs

people who run their own business

land, labor, and capital

what are the factors of production?

physical and human

what are the two types of capitals?

physical capital

machines used to perform tasks

human capital

skills that workers bring to a job

trade off

sacrificing one thing to do the other

opportunity cost

the best alternative that is given up when a decision is made

thinking at the margin

the additional benefits of a choice

cost/benefit analysis

thinking of pros and cons of each choice

marginal cost

the cost of producing one additional unit of a product or service

marginal benefit

the extra satisfaction or value a person receives from consuming one additional unit of a good or service

trade-off

because of a scarcity, every decision involves a ___

production possibilities

it is the idea of the most efficient best way to do something with the circumstances

efficiency

doing the best you can

underutilization

inefficient use of resources

law of increasing costs

to do more of one thing, you have to give up more of something else