pre sixth introduction to micro Flashcards
1
Q
What is the definition of microeconomics?
A
The study of how to best solve the basic economic problem
2
Q
What is the basic economic problem?
A
How to allocate scarce resources given unlimited wants
3
Q
What are the 4 scarce resources (factors of production)? What are their meanings?
A
Capital- man-made aids to production, enterprise- people who innovate, land- where goods can be produced or taken, labour- workers
4
Q
What are the 3 forced choices in micro?
A
What to produce, how to produce, for whom to produce for
5
Q
What is the definition of opportunity cost?
A
The cost of the next best alternative foregone when a choice is made
