intro stuff Flashcards
what is opportunity cost
it is the cost of what is lost divided by what is gained. definition is the measured cost of of engaging in a activity
what is neo classical economics
it is the approach that supply and demand drive the market
what are firms and consumers motivated by
greed and wanting the most out things (maximizing)
who maximizes
everyone
how do you find profit
the amount the product is sold for (revenue) subtracted by the cost for the producer
what is value
the max amount you are willing to give up of another good for the good good in question ( kind of like opportunity cost)
what is cost
the direct amount you payed for the good ( how much you have to give up for the good
what does specialization cause
it creates a maximum productivity by creating a large amount of people good at one thing that can trade with each other
real world example
soccer goalies train to be good at blocking balls with their hands while strikers train to get good at scoring they are both specialized in their own field
what does specialization and scarcity create
value
what is scarcity
states that we have a finite amount of goods and resources but our greed is infinite
what is economics
the study of how we as a society utilize finite recourses to satisfy our never ending greed
scarcity and choice relation ship
because we have a limited amount of recourses we have to chose between what we want and what we have to give up
thinking on the margin
marginal means for one extra unit
marginal cost
the cost of producing one more unit
