Glossary Terms:

Decision made or course of action taken when faced with a set of alternatives.

A process of examining the advantages (benefits) and disadvantages (costs) of each available alternative in arriving at a decision.

An amount that must be paid or spent to buy or obtain something. The effort, loss or sacrifice necessary to achieve or obtain something.

A conclusion reached after considering alternatives and their results.

Reaching a conclusion after considering alternatives and their results.

An increase in real output as measured by real GDP or per capita real GDP.

The study of how people, firms and societies choose to allocate scarce resources with alternative uses.

Something a person or organization plans to achieve in the future; an aim or desired result.

Money paid regularly, at a particular rate, for the use of borrowed money.

"Gifts of nature" that can be used to produce goods and services; for example, oceans, air, mineral deposits, virgin forests and actual fields of land. When investments are made to improve fields of land or other natural resources, those resources become, in part, capital resources. Also known as natural resources.

"Gifts of nature" that can be used to produce goods and services; for example, oceans, air, mineral deposits, virgin forests and actual fields of land. When investments are made to improve fields of land or other natural resources, those resources become, in part, capital resources. Also known as land.

The second-best alternative (or the value of that alternative) that must be given up when scarce resources are used for one purpose instead of another.

The basic kinds of resources used to produce goods and services: land or natural resources, human resources (including labor and entrepreneurship), and capital.

The chance of losing money.

The condition that exists because human wants exceed the capacity of available resources to satisfy those wants; also a situation in which a resource has more than one valuable use. The problem of scarcity faces all individuals and organizations, including firms and government agencies.

Desires that can be satisfied by consuming or using a good or service. Economists do not differentiate between wants and needs.