Economics: the study of the use of scarce resources to satisfy unlimited human wants. Goods: tangible commodities, such as cars or shoes. Services: intangible commodities, such as haircuts or medical care. Production: the act of making goods or services. Consumption: the act of using goods or services to satisfy wants. Scarcity implies that choices must be made, and making choices implies the existence of costs. Opportunity cost: the cost of using resources for a certain purpose, measured by the benefit given up by not using them in their best alternative use. The value of something that must be given up to acquire something else. Every time a choice is made, opportunity costs are incurred. Production possibilities boundary: a curve showing which alternative combinations of commodities can just be attained if all available resources are used efficiently. It is the boundary between attainable and unattainable output combinations.