Chapter 18 Flashcards
(8 cards)
1
Q
Economies
A
Study of how people make decisions based on wants && needs
2
Q
Economic models
A
Simplified representations of the real world that are used to explain how the economy works or to predict economic changes
3
Q
Choices to make in economic desionsp
A
- what to produce
- how to produce it
- whom to produce for
4
Q
Why do customers have to make choices in what to buy ?
A
Not enough resources to meet people’s needs && wants (( scarcity ))
5
Q
What are economic models based on ?
A
Assumptions && predictions
6
Q
Trade off
A
Alternative you face when you decide to do one thing rather than another
7
Q
Opportunity cost
A
Cost of next Best Use of time or money when you choose to do one thing rather than another
8
Q
Marginal cost
A
Extra cost of producing one additional unit of output
