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11 Cards in this Set
- Front
- Back
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Principle 1
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Scarcity implies choice
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Principle 2
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Opportunity costs are incurred
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Principle 3
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Rational people think at the margin
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Principle 4
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people respond to incentives
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principle 5
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trade makes everyone better off
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principle 6
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markets are a good way to organize economic activity
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Def of economics
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study how people make choices under conditions of scarcity and the results of those choices
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Def. of opportunity cost
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value placed on the alternative which must be given up to obtain something
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Decisions at the margin
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thinking about effects produced by small changes
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Marginal cost vs. marginal benefit
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the cost of a small increase in a activity
VS. the benefit that arises from a small increase in activity |
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Def of market economy
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how resources are allocated using market mechanism
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