introducing economics Flashcards
what is economics?
economics is a social science about making choices, scarcity and costs.
what is scarcity?
scarcity represents constraints on our demand and ability to supply. this may include limits on finance, time, technology or shortages of labour or capital
what is the marginal cost?
the cost of producing an additional unit of output
what is the marginal benefit?
the extra benefit obtained from some activity/consuming an additional good or service
what is the marginal revenue?
the extra revenue earned by a firm for selling an additional unit of output
what is the opportunity cost?
the potential benefits that an individual, investor, or business misses out on when choosing one alternative over another.
what is the optimal choice of an economic decision?
marginal benefit = marginal cost
