Chapter 1 Flashcards
1
Q
What are the four core economic principles IN ORDER?
A
- Marginal Principle
- Cost-Benefit Principle
- Opportunity Cost Principle
- Interdependence Principle
2
Q
What is the cost benefit principle?
A
Evaluation of costs and benefits to calculate economic surplus
3
Q
What is the opportunity cost principle?
A
Giving up your next best option
4
Q
What is the marginal principle?
A
Add one more unit until it becomes negative
5
Q
What is the interdependence principle?
A
Your best choice depends on your other choice
6
Q
What are the four interdependencies?
A
- your own choices
- people/firms in a market
- between markets
- through time
