Scarcity - The condition that results from society not having enough resources to produce all the things people would like to have, Economics - The study of how people try to satisfy what appears to be seemingly unlimited and competing wants through the careful use of relatively scarce resources, Need - A basic requirement for survival-i.e, food, clothing, shelter, Want - A way of expressing a need -i.e, Need: Food; Want: Pizza, Cognitive Bias - A systematic error in thinking that happens when people try to understand the world around them, Entrepreneur - A risk-taker in search of profits who does something new with existing resources, Endowment Effect - A cognitive bias that causes people to value items that they own more highly than they would if they did not belong to them, Opportunity Cost - The cost of the next best alternative use of money, time, or resources when another choice is made rather than another, Sunk Cost Fallacy - The tendency to keep doing something we’ve already invested heavily in (time, money, effort), even when giving up is clearly a better idea., Capitalism - Type of market economy in which the factors of production are privately owned., Command Economy - Economic system characterized by a central authority that makes most of the major economic decisions., Competition - The struggle among sellers to attract consumers., Consumer Sovereignty - Term meaning consumers control the market and decide what gets produced., Market Economy - Economic system in which supply, demand, and the price system help people make decisions and allocate resources. No government involvement., Mixed Economy - Economic system that has some combination of traditional, command, and market economies., Private Property - Fundamental feature of capitalism, which allows individuals to own and control their possessions as they wish., Profit Motive - Driving force that encourages people and organizations to improve their material well-being., Loss Aversion - A cognitive bias that causes people to perceive losses as more significant than gains., Voluntary Exchange - Act of buyers and sellers freely and willingly engaging in market transactions., FOMO - "Fear of Missing Out", a popular explanation for why people make the economic choices that they do,

Unit 1: Behavioral Economics & Basic Economic Concepts

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