Econ

The cost-benefit principle indicates that an action should be taken

if the extra benefit is is greater than or equal to the extra costs

if a given production combination is efficient, then it must be

on the production possibilities curve

the production possibilities curve shows

the maximum production of one good for every possible production level of the other good

The opportunity cost of an activity is the value of

the next-best alternative forgone

The scarcity principle indicates that ______ and the cost principle indicates ________

choices must be made; how to make the choices

Every time you go to the grocery store, you try to choose the shortest line. But all of the lines always seem to be the same length. Why?

Everyone else is trying to choose the shortest line, too

Jenna decides to see a movie that costs $7 for the ticket and has an opportunity cost of $20. After the movie, she says to one of her friends that the movie was not worth it. apparently,

Jenna overestimated the benefits of the movie

If Leslie can produce two pairs of paints in an hour while Eva can make one pair an hour, then it must be the case that

Leslie has the absolute advantage

Chris has a one hour break in between classes every Wednesday. Chris can either study in the library and study or go to the gym to work out. This is..

an economic problem, because the one hour time limit means Chris must make a choice.

Microeconomics is distinguished from macroeconomics in that microeconomic focuses on

choices made by individuals or groups in context of individual markets

Economic questions always deal with..

choice in the face of limited resources

if a given production combination is known to be attainable, then it must be

either an inefficient or efficient point

In general, rational decision making requires one to choose the actions that yield the

largest economic surplus

according to the principle of increasing opportunity cost, expanding production requires using resources in which order:

start with the resource with the lowest opportunity cost and proceed to the higher opportunity cost resources