Objective 1 Flashcards
Marginal analysis
A process of subtracting the marginal costs from the marginal benefits to determine an incremental effects of a given activities.
Marginal benefit
The total benefit (revenue) incurred attributed to the next decision
Marginal cost
The total cost incurred attributed to the next decision
Net benefits
The benefits remaining after subtracting the total costs from the total benefit (revenue)
Normative economic analysis
Opinion-based analysis, or what ought to be a policy
Positive economic analysis
Objective, or data-driven analysis of the results of a given policy
Opportunity cost
The highest valued alternative not chosen to acquire something of benefit, or the benefit that would have been received if the alternative had been chosen.
Scarcity
The basic economic problem arising because resources are limited and people have unlimited needs and wants.
