opportunity cost ------ the next best alternative that we give up when we make a chioce scarce ------ limited marginalism ------ additional costs or benefits sunk costs ------ costs that cannot be avoided because they have already been incurred efficient market ------ a market in which profit opportunities are eliminated almost instantaneously microeconomics ------ branch of economics that examines the functioning of INDIVIDUAL industries and the behavior in individual decision making units- that is, firms and households macroeconomics ------ branch of economics that examines the economic behavior of aggregates-income, employment, output, and so on- on a national scale positive economics ------ understand behavior and the operation of economic systems WITHOUT MAKING JUDGMENTS normative economics ------ looks at the outcomes of economic behavior and asks whether they are good or bad and whether they can be made better. INVOLVES JUDGEMENTS descriptive economics ------ compilation of data that describe phenomena and facts economic theory ------ cause and effect ceteris paribus ------ all else equal. relationship between 2 variables while the values of other variables are held unchanged efficiency ------ produces what people want at the least possible cost equity ------ fairness economic growth ------ an increase in the total output of an economy stability ------ national output is growing steadily, with lo inflation and full employment of resources capital ------ things that are produced and then used in the porduction of other goods and services factors of production ------ inputs into the process of production. another term for resources production ------ transforms scarce resources into useful goods and services absolute advantage ------ if he or she can produce the product using fewer resources comparative advantage ------ if he or she can produce that product at a lower opportunity cost investment ------ the process of using resources to