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8 Cards in this Set
- Front
- Back
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What is meant by opportunity cost.
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Value of the next best forgone alternative when a decision is made (action taken)
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What is marginal analysis
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Analyze situations where something changes incrementally
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What is the general rule of marginal analysis.
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The analysis continues if marginal benefit equal or greater then marginal cost
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What is true about Laws of supply and demand
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Forces behind them are very powerful if you try to interfere with them, there will be negative consequences
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What is an externality
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Someone outside of a transaction is affected by that transaction. This may be good or bad, positive or negative, beneficial or detrimental.
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What is meant by mutual gains from voluntary exchanges
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If an exchange occurs and it is voluntary, all parties must benefit, otherwise the transaction would not occur.
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Consumer or consumption goods are goods that
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Are purchased for their own use
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What is a capital good
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These goods are used to make other goods.
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