Microeconomics Chapter 1 Vocabulary

Scarcity

limited resources for unlimited wants

opportunity cost

value of the next best alternative forgone

utility

Satisfaction or pleasure from consuming a good or service

marginal analysis

Comparison of marginal benefits and marginal costs

budget line

shows combination of goods a consumer can afford

production possibility curve

Curve showing maximum possible production combinations

economic resources

Land, labor, capital, entrepreneurial ability

full employment

all available resources are being used efficiently

investment

spending on capital goods( not consumer goods)

ceteris paribus

holding other things constant

positive economics

factual, objective analysis

normative economics

subjective, opinion-based analysis