5. Terms to Remember
a state in which the available quantity of a good is less than the desired quantity at zero price.
goods whose quantities are sufficient to satisfy all our wants; we can obtain them without any cost.
goods whose quantities are insufficient to satisfy all our wants; we obtain them with a cost.
the act of choosing among options.
the highest-valued option forgone.
a society viewed as an economic community.
economy in which the basic economic problems are resolved through the customs and traditions of the community.
economy in which resources allocation is done by the market forces of demand and supply.
economy in which economic decisions are taken by a central planning authority.
also called market mechanism, it is a method of allocating resources through the market forces of demand and supply.