CH1:Limits, alternatives and choices Flashcards
What is opportunity cost?
It is the best alternative forgone.
What is the formula to calculate opportunity cost?
what you give up/what you get
Positive economics
Information that includes facts
Normative economics
Information based on judgement and opinion.
what are the factor of production?
capital-human made resources to produce goods.
Land-natural resources
Labor-physical and emotional put in to produce a product
Entrepreneur- chance to start a new business venture
what are the causes of economic growth?
Advanced technology
improved education
discovery of natural resources
what is the optimal amount?
Marginal benefit=marginal cost
What is a budget line?
a graph that shows the combination of two products that can be purchased given the price and consumer income.
