Glossary Terms:

The Opportunity Cost of a Lifetime

Glossary terms from:
http://www.econedlink.org/e51


Alternative

One of many choices or courses of action that might be taken in a given situation.

Choice

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

Costs

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

Decision

A conclusion reached after considering alternatives and their results.

Decision Making

Reaching a conclusion after considering alternatives and their results.

Economics

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

Money

Anything that is generally accepted as final payment for goods and services; serves as a medium of exchange, a store of value and a standard of value. Characteristics of money are portability, stability in value, uniformity, durability and acceptance.

Opportunity Cost

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.

Price

The amount of money that people pay when they buy a good or service; the amount they receive when they sell a good or service.

Resources

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

Scarcity

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.

Spend

Use money now to buy goods and services.

Trade

The exchange of goods and services for money or other goods and services.

Trade-off

The giving up of one benefit or advantage in order to gain another regarded as more favorable.

Wants

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