microeconomics chapter one

Question 1

cost benefit principle

Answer 1

shape decisions
(full set of costs and benefits associated with that choice)

Question 2

opportunity cost principle

Answer 2

alternatives of choice
(true of cost of something = next best alternative to give up)
“or what”

Question 3

marginal principle

Answer 3

more or less
(decisions made incrementally)
“one more”

Question 4

interdependence principle

Answer 4

how different decisions affect each other
(recognizes depends on you, others, market’s choices)
“what else”

Question 5

interdependence type 1 (dependence - choice)

Answer 5

limited resources making every choice affecting the available resources for other decisions

Question 6

interdependence type 2 (dependencies - others)

Answer 6

choices by other economic actors like people/business shape choices available to you

Question 7

interdependence type 3
(markets)

Answer 7

changes price/opportunity in one market affect choices made in another

Question 8

interdependence type 4
(time)

Answer 8

when to produce/bring goods to market, hire/invest/work