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Name___________________________________________ Block_________________________Chapter 1 Economics Vocabulary Directions: Look up the following words and write down their definitions. Economics-the study of how people choose to use their limited resources to satisfy their unlimited wantsEconomy-?a system used to manage limited resources for the production, distribution, and consumption of goods and servicesEconomic Enigmas-a puzzle or riddle that may be explained through economic analysisResource-anything used to produce an economic good or serviceMicroeconomics-the study of the economy at the level of individuals, households, and businessesMacroeconomics-the study of the workings of the economy as a wholePositive Economics-the branch of economics that uses objective analysis to find out how the economy actually worksNormative Economics-the branch of economics that makes value judgments about the economy; its focus is on which economic policies should be implementedScarcity-the condition that results because people have limited resources but unlimited wantsTradeoff-the exchange of one benefit or advantage for another that is thought to be betterBenefits-what is gained from something in terms of money, time, experience, or other improvementsMargin-the border or outer edge of somethingMarginal cost-what is given up by adding one more unit to an activityMarginal benefit-what is gained by adding one more unit to an activityIncentive-something that motivates a person to take a particular course of action ................
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