AP- ECONOMICS 9

ECONOMICS

how an individual makes choice in deciding how to allocate the scarce resources

scarcity

human wants are unlimited, but the resources available to satisfy those wants are limited.

MICROECONOMICS

Studies the smaller units of the economy

MACROECONOMICS

Studies the entire activities of the bigger economy.

Basic Economic Question

society must decide how to use its available resources.

What to produce?

Producers must decide which products people need or want the most.

How to produce?

What is the best way to produce goods and services

For whom to produce?

Who will receive the goods and services that are produced

Trade-off

the act of giving up one thing in order to get or choose another

Incentive

something that motivates or encourages a person

Marginal Thinking

considering the additional (extra) benefits and additional costs of doing one more unit

Opportunity Cost

The value of the next best alternative that you give up when making a choice

SUSTAINABLE Development

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs

economic

Promoting economic growth without harming people or the environment

social

Improving people's quality of life