Ch. 3 Optimization: Doing The Best You Can

Question 1

Calculates the change in net benefits when a person switches from one alternative to another and then uses these marginal comparisons to chose the best alternative.

Answer 1

Optimization in differences.

Question 2

Identifies the specific situations in which people fail to optimize.

Answer 2

Behavioral economics.

Question 3

The best feasible choice.

Answer 3

Optimum

Question 4

The comparison of economic outcomes before and after some economic variable is changed.

Answer 4

Comparative statics

Question 5

A cost- benefit calculation that focuses on the difference between a feasible alternative and the next feasible alternative.

Answer 5

Marginal analysis

Question 6

The extra cost generated by moving from one feasible alternative to the next feasible alternative.

Answer 6

Marginal cost

Question 7

An optimal feasible alternative has the property that moving to it makes you better off and moving away from it makes you worse off.

Answer 7

Principle of optimization at the margin.

Question 8

Optimization in levels examine ____, while optimization is differences analyzes _____.

Answer 8

Total net benefits of alternatives, the change I net benefits.

Question 9

Calculates the total net benefit of different alternatives, and then chooses the best alternative.

Answer 9

Optimization in levels.