Intro Flashcards
What is economics about?
Making choices, scarcity and costs
What is microeconomics?
The branch of economics that studies the specific choices made by consumers and producers
What is the most important assumption in microeconomics?
Ceteris paribus - all else is equal
What does scarcity represent?
Constraints on our demands and ability to supply
Name four types of scarcity.
- ) Limits on finance
- ) Limits on our time
- ) Limits on technology
- ) Shortages of labour and capital
Define marginal cost.
The cost of making and xtra unit of output
Define marginal benefit.
The extra benefit from some activity
Define marginal revenue.
The extra revenue earned by a firm for selling one more unit of output
What is utility?
The benefit derived from the consumption of goods and services
What is the optimal choice? And what equals what at this point?
Where the benefit from consuming that last unit of good is the same as the cost of consuming that unit, Marginal benefit = Marginal cost
What does the word marginal mean?
Extra or change in
