Chapter 1 Flashcards
1
Q
Sunk cost
A
A previously incurred & irreversible cost
2
Q
Margin
A
Choice made by comparing all relevant alternatives systematically and incrementally
3
Q
Marginal cost
A
Opportunity cost that rises from a one-unit increase in an activity
4
Q
Marginal benefit
A
Benefit that arises from a one-unit increase in activity
5
Q
Positive statements
A
What is, can be right or wrong
6
Q
Normative Statements
A
What ought to be
7
Q
Natural Experiment
A
A situation that arises in the ordinary course of economic life in which one factor of interest is different
8
Q
Statistical investigation
A
Looks for a correlation in a predictable & related way
9
Q
Economic experiment
A
Puts people in a decision-making situation & varies influence of one factor at a time to study responses
10
Q
Opportunity Cost
A
The best thing given up
