This document defines key terms from chapters 18, sections 1 and 2 of an economics textbook. In section 1, it defines needs as things required for survival, wants as things we would like to have, economics as the study of how we make decisions with limited resources, microeconomics as looking at small economic pictures, and macroeconomics as looking at the big economic picture. It also defines economic models, economic systems, resources, and scarcity. Section 2 defines trade-offs as alternatives when choosing one thing over another, opportunity cost as the cost of the next best alternative, marginal cost as the additional cost of one more unit of output, marginal benefit as the additional satisfaction from one more unit, and cost-benefit analysis as

1. Civics and Economics Vocabulary
Chapter 18 - Section One
Need- required for survival
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Want- things we would like to have
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Economics- the study of how we make decisions in a world in which resources are
limited
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Microeconomics- economists look at the small picture
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Macroeconomics- looks at the big picture
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Economic Model- a theory that tries to explain human economic behavior
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Economic System-way of producing the things its people want and need
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Resource- things used in making goods and providing services
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Scarcity- occurs whenever we do not have enough resources to produce all the things
we would like to have
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Chapter 18 - Section 2
Trade-Off- the alternative you face if you decide to do one thing rather than another
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Tara Pawlyk Friday, May 17, 2013 8:19:47 AM ET 04:0c:ce:d3:10:88

2. Opportunity Cost- cost of the next best use of your time or money when you choose to
do one thing rather than another
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Marginal Cost- the additional cost of producing one additional unit of output
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Marginal Benefit- the additional satisfaction or benefit received when one more unit is
produced
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Cost-benefit Analysis- comparing the marginal benefits against the marginal costs
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Tara Pawlyk Friday, May 17, 2013 8:19:47 AM ET 04:0c:ce:d3:10:88