Micro- 1.3 Opportunity Cost

Question 1

What’s opportunity cost?

Answer 1

The value of the next best alternative forgone.

(Basically when you pick one thing you miss out on the other)

Question 2

What’s marginal analysis?

Answer 2

It’s an approach to decision making based on considering the additional benefits and costs of a change in behaviour.

Question 3

What’s are ppc’s used for?

Answer 3

Help economists to analyse trade offs
They show the maximum possible combo of goods and services that can be produced using all available resources at a given point in time.