unit 1: intro to economics Flashcards
1
Q
what is economics?
A
study of human behavior (decision making) and the principles that have been developed to explain their behavior
2
Q
what does economics involve in terms of human behavior?
A
- self-interest
- react to incentives (a reward)
- think on the margins = opportunity cost
- maximizing the benefit, minimizing the cost
3
Q
marginal benefit
A
the extra benefit of adding one unit
4
Q
marginal cost
A
the extra cost of adding one unit
5
Q
opportunity cost
A
the most desirable alternative given as the result of a decision (trade-offs)
6
Q
opportunity cost formula
A
what you give up (divided by) what you are producing
7
Q
scarcity
A
resource issue, exists if we desire more than something than we have
8
Q
A
