1. Principle Of Economic Thinking Flashcards
1
Q
trade-off
A
having/producing one thing means having to give up another
2
Q
opportunity cost
A
the value of the next-best alternative when a decision is made, is what given up
3
Q
thinking at the margin
A
extend the level of an activity of marginal benefit exceeds marginal cost
4
Q
marginal cost
A
cost of producing/consuming an additional unit of a good
first derivative of C(Y) (cost)
5
Q
marginal benefit
A
revenue of selling an additional unit of a good
first derivative of R(Y) (revenues)
6
Q
marginal utility
A
utility from consuming an additional unit of a good
7
Q
incentives
A
what motivates you to behave in a certain way
8
Q
strategic operation
A
the optimal decision of a firm depends on the decisions of other, while their optimal decision depends on his
