economics

You decide to take a vacation and the trip costs you $2,000. While you are on vacation, you do not report to work where you could have earned $750. The opportunity cost of the vacation is

$2,750

Economics is best defined as the study of how people, businesses, governments, and societies

make choices to cope with scarcity

The term used to emphasize that making choices in the face of scarcity involves a cost is

opportunity cost

When the government chooses to use resources to build a dam, these sources are no longer available to build a highway. This choice illustrates the concept of

opportunity cost

The most fundamental economic problem is

scarcity

Marginal cost is the cost

that arises from an increase in an activity

The opportunity cost of something you decide to get is

the highest valued alternative you give up to get it

The opportunity cost of any action is

the highest-valued alternative forgone

The benefit that arises from an increase in an activity is called

the marginal benefit

If the cost of a computer falls by a large amount, you have an incentive to

uy a new computer

Scarcity is a situation in which

we are unable to satisfy all our wants

On Saturday morning, you rank your choices for activities in the following order: go to the library, work out at the gym, have breakfast with friends, and sleep late. Suppose you decide to go to the library. Your opportunity cost is

working out at the gym

Because we face scarcity, every choice involves

an opportunity cost

The term "opportunity cost" points out that

any decision regarding the use of a resource involves a costly choice

Making a choice at the margin means

deciding to do a little bit more or a little bit less of an activity

As an economic concept, scarcity applies to

both money and time

Economists point out that scarcity confronts

both the poor and the rich