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Intro-to-Business-Ch.-1-2-Worksheet - Intro to Business...

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Intro to Business Chapter 1-2 Notes The Basic Economic Problem Individuals and businesses have unlimited wants and needs, but the economic resources they have are limited. The basic economic problem is ________________________________ ____________________________________________________________ Example: Your school may have to cut back on certain classes or extracurricular activities because operating costs are increasing faster than the annual budget. Scarcity __________________________________________________ ___________________________________________________________ Choices Everyone makes decisions based on _______________________. Scarcity forces you to make choices or decisions among the alternatives. _________________________________is the process of choosing which wants, among several options, will be satisfied. Tradeoffs and Opportunity Costs Most of the choices you make result from considering a number of alternatives. When you decide on one alternative, ______________________________________________________. A ______________________ is when you give up something to have something else. __________________________________ is the value of the next-best alternative that you did not choose. The benefit you get from your choice should be greater than the benefit from the next-best choice.
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The Decision-Making Process There are six steps in the decision-making process.
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