Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
13 Cards in this Set
- Front
- Back
|
What is the definition of Economics?
|
Economics is the study of how people make choices under conditions of scarcity, and of the results of those choices for society.
|
|
|
What is the SCARCITY PRINCIPLE? And what is another name for it?
|
The scarcity principle is one of the core principles of economics. Another name for it is "the No-free-lunch" principle. It states:Although we have boundless needs and wants, the resources available to us are limited. So having more of one good thing usually means having less of another.
|
|
|
What is the Cost-Benefit Principle?
|
The cost-benefit principle states: An individual (or a firm, or a society) should take an action if, and only if, the extra benefits from taking the action are at least as great as the extra costs.
|
|
|
What is a rational person?
|
A rational person is someone with well-defined goals who tries to fulfill those goals as best he or she can.
|
|
|
What is Economic Surplus?
|
Economic surplus: the economic surplus from taking any action is the benefit of taking that action minus its costs.
|
|
|
What is opportunity cost?
|
The opportunity cost of an activity is the value of the next-best alternative that must be forgone in order to undertake the activity.
|
|
|
What is Sunk Cost?
|
A cost that is beyond recovery at the moment a decision must be made.
|
|
|
What is Marginal cost?
|
The increase in total cost that results from carrying out one additional unit of an activity.
|
|
|
What is Marginal Benefit?
|
The increase in total benefit that results from carrying out one additional unit of an activity.
|
|
|
What is Average Cost?
|
the total cost of undertaking N units of an activity divided by N.
|
|
|
What is Average Benefit?
|
the total benefit of undertaking N units of an activity divided by N.
|
|
|
What is Microeconomics?
|
The study of individual choice under scarcity and its implications for the behavior of prices and quantities in individual markets.
|
|
|
What is Macroeconomics?
|
The study of the performance of national economies and the policies that governments use to try to improve that performance.
|
