Ch. 1- Economics Foundations and Models Flashcards
1
Q
Economics
A
The study of choices consumers, business managers, and government officials make to attain their goals given their scarce resources.
2
Q
Scarcity
A
Even though our wants are unlimited, the resources needed to fulfill those wants are limited.
3
Q
3 Important Economic Ideas
A
- People are rational
- People will respond to economic incentive
- Optimal decisions are made at the margin
4
Q
Market
A
A group of sellers and buyer of a good or service coming together to trade
5
Q
Marginal
A
“extra” or “additional”
6
Q
Optimal decision to continue an activity…
A
When MB=MC
7
Q
Marginal Analysis
A
Comparing marginal cost and marginal benefit
8
Q
Trade-offs
A
