Decisions you make today will influence your financial situation tomorrow. You make these decisions based on supply and demand, needs and wants, incentives, scarcity, and inflation. All of this can be summarized by “your current economic situation.” Limited personal financial resources affect the choices you make. You may have to give up one item to have a more valuable item (opportunity cost). When making large financial decisions, you should not make decisions on a whim. Instead, you should follow a detailed plan.
Pre-Assessment:
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Key Vocabulary:
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Competition | Exhaustible | Marginal Benefit | Renewable |
Demand | Externalities | Marginal Cost | Scarcity |
Economics | Factors of Production | Money | Services |
Elasticity | Goods | Needs | Supply |
Entrepreneur | Incentives | Opportunity Cost | Wants |
Entrepreneurship | Inelastic | Price Ceiling | |
Equilibrium | Inflation | Price Floor |