Essentials of Economics lecture 1 Flashcards
1
Q
What is the economic problems?
A
Unimited needs/ wants vs limited resources
2
Q
What is microeconomics?
A
- Focuses on the individual
- Individuals make decisions under scarcity
3
Q
What are the resources of society?
A
1) Labour- workforce
2) Land - raw materials
3) Capital - machines
4) Entrepreneurship - ideas that produce future profit
4
Q
Whats the reservation price?
A
Price at which a person is indifferent between doing something and not doing it
5
Q
What is the opportunity cost?
A
The value that must be sacrificed to do the activity
6
Q
What is a sunk cost?
A
Payments you can make that can’t be refunded or recovered
7
Q
Whats an accounting cost?
A
Total cost of doing something
8
Q
Whats a marginal cost/benefit for a consumer?
A
Additional costs/benefits of increasing consumption by one unit
