The study of how people make choices under conditions of scarcity and of the results of those choices for society.

Although we have boundless needs and wants, the resources available to us are limited, so having more of one good thing usually means having less of another.

An individual should take action if and only if, the extra benefits from taking the action are at least as great as the extra costs.

Someone with well-defined goals who tries to fulfill those goals are best he or she can.

The benefit of taking action minus its cost.

The value of what must be forgone to undertake an activity.

A cost that is beyond recovery at the moment a decision must be made.

The increase in total cost that results from carrying out one additional unit of an activity.

The increase in total benefit that results from carrying out one additional unit of an activity.

One that says how people should behave.

One that predicts how people will behave.

A person (or a firm or a society) is more likely to take an action if its benefit rises, and less likely to take it if its cost rises. In short, incentives matter.

the study of individual choice under scarcity and its implications for the behavior of prices and quantities in individual markets.

The study of the performance of national economies and the policies that governments use to try to improve that performance.