Micro Notes 2+3 Flashcards
the cost of choosing; what you give up by choosing one option
opportunity cost
objects that can fulfill human wants/needs, provide utility
goods
economic activity that is intangible; provides utility, but cannot be stored
services
natural and human resources from which all goods and services must be produced
-infinite, but not fixed
endowment
satisfaction; economists assume maximizing this drives individual choice; measured in utils
utility
a measure of utility
util
in a succession of units, the specific unit you are focusing on
margin
evaluating the impact of one additional unit
marginal analysis
additional increment of utility associated with consuming one more unit of a good or service
marginal utility
the total satisfaction derived from consuming a specific quantity of a good or service; the total of marginal utilities for all individual units consumed
total utility
satisfy
satiate
over-simplified decision-making process based on utility (consume until marginal utility)
initial decision
maximization of utility
bliss point
utility diminishes the further in the future that utility is realized
discounting the future
initially, one input increases the initial successive units of input toward the output, but eventually this will add to less output
diminishing marginal productivity
maximizing utility in light of scarcity
balancing at the margin
the tendency of people to engage in activities that will lead to monetary gain
profit motive
the economic power of the individual in a free market
consumer sovereignty
requirements the government places on private firms and individuals to achieve the government’s goals
government regulation
these vary from person to person/society/economy:
Freedom
Security
Equity
Growth
Efficiency
Stability
social & economic goals
