Fundamentals 1

economics studies how individuals and businesses make decisions in a world of ____ resources.

SCARCE

because the world is characterized by scarcity, people must choose between different uses for the resources at their disposal. In economics, we refer to this as:

allocating resources

the process of assigning a good, service or a resource to one use instead of another describes "______."

allocation

there is no incentive to either increase or decrease the level of one activity performed when:

mb=mc

the value of the next-best, forgone alternative is the _____ _______.

opportunity cost

when the marginal benefit equals the marginal cost, that stable level is referred to as an _________

optimal level

The comparison of the scarcity of one good, service, or resource to that of another is called "_______ scarcity."

relative

economics is the study of how individuals and societies allocate _____ resources among many competing uses.

scarce

the optimal level of economic activity occurs when:

the marginal benefit equals the marginal cost

because resources are scarce

they must be allocated between competing uses.

the term "scarcity" describes the fact that people's ____ wants cannot he completely satisfied with ____ resources.

unlimited; limited