study guide chapter 1

fundamental concepts in economics are

- opportunity cost -marginalism -effective markets

The principle that irrelevant detail should no be included In a model is know as

Ockham's razor

opportunity cost can be best defined as

The value of the best alternative given up when making a choice.

The concept of opportunity cost

can be applied to the analysis of any decision making process

if we wish to observe the effect that an increase in X has on Y as long as nothing else is changing, then we are making the assumption of

ceteris paribus

sunk costs are

costs that cannot be avoided because they have already been incurred

scarcity is the reason that opportunity costs arise

false

The branch of economics that examines the fuctioning of individual industries and the behavior of individual decision-making units is

microeconomics

Economic desicions have affected the

physical environment, character of society, nature and number of jobs, level of material welfare

there is great concern over the fact that millions of Americans still do not have health insurance. A study of the costs and benefits of implementing a national health-insurance program is an example of

positive economics

marginal cost is best defined as

the cost of producing one more unit of output