Economics terms everyone should know
Here are a few to get started.
Opportunity cost: The cost of doing something in terms of time and money.
Examples: If you watch one movie, you cannot watch another.
If you go to one school, you cannot attend another.
Risk versus uncertainty: Risk can be described in probabilities.
That’s why there’s no insurance for bad dates — or climate change!
Examples: My phone costs $600, but that’s less than $1/day if I use it for 2 years.
If I spend 10 hours learning how to do my taxes when I am 25, I can use that knowledge for the rest of my life to save on accountant fees (as well as having a much better idea of how the government "thinks" and how to track my finances).
Examples: This bike is worth $400 to me but it’s priced $200.
The seller may only value it at $100.