Ekonomi tenta Flashcards
Opportunity cost?
Opportunity cost is the forgone opportunity to do something else withe the same money, time or activity. if you buy a magazine for $5, you cant buy a coffe or a cake for those money. You have to decide if the opportunity cost is worth it, or can i do something else for the money.
Net present value?
Net present value is how you value events in the future, as if they was taking place today. To get the monetary cost and benefits for social projects and evaluate if the benefits exeeds the costs.
Decreasing marginal utility?
Decreasing marginal utility is when the value or enjoyment/satisfaction of consuming one more additional unit of a good or service is decreasing. The demand gets lower and lower for each unit you consume and you value it less and less. for examample: a consumer are given free icecream in a store, the first icecream has a high satistaftion level, the second one gives a lower satisfaction level, and when the consumer gets the third icecream they are tired of icecream and dont want to eat them anyymore. = the value level has decreaded.
Public Good?
Public good:
-The cost of an extra additional (new/extra) customer is zero and the additional customer dont affect the other users in their consuming or producing of goods. Public goodsare non-rivalry = that the use of something dont hinder others from also using it. Examples: breathing air, swinging in the ocean or walking in a park dont hinder other people from doing the same thing.
-They are also non-exclusive:thatyou cant stop or exclude people from benefit from it, even if they dont contribute to pay for it (if not paying taxes for example) Examples of non-exclusive goods are: national defense, a light house (fyr), or driving a car on a highway.
Privat good?
Private good:
Private good has a defined ownership/property rights to them.If i buy a cari hinder others from consuming that specific car.Iown it and can exclude others from using and consuming it. Private goods can be:
Rivalry: Being ina boat on a lake is non-rival, use dont hinder others, but fishing in the lake is rival. If you catches to many fish´s you affect the outcome of other people fishing in the lake. then fishing becomes rival.
Exclusive: Driving a car on a bridge can be non-rival if there are low traffic. It can also be non-exclusive if there are no bridge fee. But if they add a fee/tax to get tax revenues it becomes exclusive to drive the car on the bridge.
Cost-benefit-analysis, Ecplain discount rate and discounting?
Discount rate are the % ratein calculations, used to value future events or social projects in monetary terms, and their benefits and costs in todays benefits and costs.
-A positive discount rate: that future events/projects has a lower value, than if the same event happened today.
-A zero discount rate: that future events/projects has the same value, as if the same event happened today.
-A negative discount rate: that future events/projects, has a higher value,than if the same event happened today.
Its important to chose aappropriate rate because if you use a too high rate you may miss the non-use values and dont take the environmental impact of a project into consideration. How we value the environment today will affect future generations and can make environmental problems larger if we value projects with a to positive or a close to zero rate. its better to use a more negative discount rate to take all impacts and cost and benefits into consideration.
