unit two- key economic principles Flashcards
1
Q
the value of the next-best, foregone alternative when you’ve made an economic decision
A
opportunity cost
2
Q
one, single additional benefit (of a given unit)
A
marginal benefit
3
Q
one, single additional cost (of a given unit)
A
marginal cost
4
Q
rational people make decisions if and only if…
A
the marginal benefits outweigh the marginal costs
5
Q
well informed, self interested decisions that benefit the interest of society as a whole
A
the invisible hand
6
Q
the extra productivity boost spurred by specialization
A
gains from trade
