Eco w/ PFL Unit 1 Vocabulary

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Scarcity

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There are not enough resources available to produce everything that individuals demand.

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Choice

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Prioritizing between different options based on preferences, constraints, and available resources.

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Opportunity Cost

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The potential benefits that an individual, investor, or business misses out on when choosing one alternative over another.

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Production-Possibilities Curve (PPC)

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An economic model that shows various output combinations of two goods and demonstrates the concept of opportunity cost.

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Cost-Benefit Decision Making

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Weighing the potential costs and benefits of a choice or action to determine whether it's worthwhile.

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Economic System

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The way a society organizes its production, distribution, and consumption of goods and services.

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Traditional Economy

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Economic decisions are made on the basis of customs and beliefs handed down from one generation to the next (e.g., Bushmen).

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Market Economy

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Decisions are made by private individuals and businesses, also referred to as free enterprise.

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Free Enterprise

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An economic system where individuals and businesses have the freedom to produce, exchange, and consume goods and services without significant government intervention or control.

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Mixed Market

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Economic decisions are made in a shared relationship between a central authority and private institutions (e.g., Canada and Mexico).