Entrepreneurship Chapter 2 Terms Review

Wants

Things that you think you must have to be satisfied

Economic resources

The means through which goods and services are produced

Scarcity

Occurs when people’s needs and wants are unlimited and the resources to produce the goods and services to meet those needs are limited

Economic decision making

The process of choosing which needs and wants you will satisfy using the resources you have

Opportunity cost

The value of the next-best alternative—the one you pass up

Equilibrium price and quantity

The point at which supply and demand meet

Marginal benefit

Measures the advantages of producing one additional unit of a good or service

Capitalism

The private ownership of resources by individuals rather than the government

Demand

The quantity of a good or service that consumers will buy at a given price

Variable costs

Costs that go up and down depending on the quantity of the good or service produced