Econ Alive Chapter 1 Vocabulary Terms

what is gained by adding one more unit to an activity

• scarcity
• marginal benefit
• incentive
• marginal cost

something that motivates a person to take a particular course of action

• scarcity
• benefit
• incentive
• economics

a method of rational inquiry with six steps: (1) posing a question, (2) researching the question, (3)developing a hypothesis, (4) conducting studies and collecting data, (5) analyzing the data, and(6) evaluating the hypothesis

• cost-benefit analysis
• economic enigma
• scientific method
• economic model

the branch of economics that makes value judgments about the economy; its focus is on which economic policies should be implemented

• normative economics
• benefit
• economy
• cost-benefit analysis

an arrangement that brings buyers and sellers together to do business with each other

• cost
• variable
• market
• economy

a visual representation of the relationship between two sets of data

• curve
• graph
• data
• variable

the exchange of one benefit or advantage for another that is thought to be better

• scarcity
• market
• cost
• tradeoff

the general observation that the actions of people and governments always have effects that are not expected or intended

• law of unintended consequences
• markets-coordinate-trade principle
• macroeconomics
• marginal benefit

the idea that people behave in ways that are based on reason and self-interest

• rational decision making
• economic model
• rational-behavior model
• normative economics

a quantity that can vary, or change

• variable
• fixed
• market
• periodic