Question: Incentives

Answer: Reward for engaging in a particular activity.

Question: Economics

Answer: The study of how people allocate their limited resources to satisify their unlimited wants

Question: Resources

Answer: Things used to produce goods and services to satisfy people’s wants.

Question: Wants

Answer: What people would buy if their incomes were unlimited

Question: Microeconomics

Answer: The study of decision making undertaken by individuals (or households) and by firms.

Question: Macroeconomics

Answer: The study of the behavior of the economy as a whole

Question: Aggregates

Answer: Total amounts or quantities

Question: Economic System

Answer: A society’s institutional mechanism for determining the way in which scarce resources are used to satisify human desires.

Question: Rationality Assumption

Answer: The assumption that people do not intentionally make descisions that would leave them worse off

Question: Models or Theories

Answer: Simplified representations of the real world used as the baisis for predictions or explanations