MicroEconomics Learn Smart 1
when you decide to turn off the bedroom light on your way to the kitchen so that you can save a little money on your electric bill, you are engaging in... a calculated choice scarce decision making active decision making marginal decision making
marginal decision making (comparing the benefits and costs of an additional minute of electricity)
The study of ______________ deals with how the whole economy can be affected by important national and global events, such as wars and natural disasters.
macroeconomics
Marginal Benefit
the additional benefit associated with one or more unit of an activity
The best optimization is when...
the marginal benefits are equal to the marginal cost
The marginal Cost of an activity can be found by calculating the change in:
the total costs as the level of the activity increases by one unit
The process of assigning a good, a service, a resource to one use instead of another describes " __________________"
Allocation
______________ ability involves assuming risk and organizing resources into a productive process.
Entrepreneurial
Martin has given himself an entertainment budget of $5 per week. He has decided that each week he will spend the $5 by either attending a matinee movie or downloading 5 new songs by his favorite artists. What is the non-monetary opportunity cost of seeing a movie this week? $5 one movie one movie and five songs five songs
Five songs
The additional cost associated with one ore more unity of an activity is the ____________
Marginal Cost
Rational decision making is based on three assumptions: Utility minimization marginal decision making self-interest Altruistic behavoir Optimization
Marginal decision Making Self-Interest Optimization
When someone compares marginal benefits associated with an activity to its marginal costs, that person is making a ______________ decision.
Rational
____________ Means that resources are limited
Scarcity
What is the marginal benefit?
The initial total benefit minus the initial total cost with each unit.
The more of a good or a service that is consumed in a given period of time, the lower the marginal ________.
benifit
If the marginal benefit of an activity exceeds the marginal cost of an activity (MB>MC), we should
continue to increase output until MB = MC
As the amount of an activity increases, the Marginal Benefit __________
decreases
Economics is about: How people make choices in a world of scarcity the ways in which consumers and producers negotiate the various types of insurance people can purchase how people get wealthy
how people make choices in a world of scarcity
the earliest two fundamental steps in learning the economic way of thinking are understanding...
how resources
The value of the next-best, forgone alternative is the ___________.
opportunity cost
Self-interest, marginal decision making, and optimization form the basis for:
rational decision making
Because the world is characterized by scarcity, people must allocate the limited _____________ at their disposal among many competing uses.
resources
Every person's and every economy"s standard of living relies on the effective use of ______________.
resources
If you decide to produce at a level where marginal cost exceeds marginal benefits (MC>MB), there is a waste of _______________ that could be better used somewhere else.
resources
A common economic situation where an economy's resources are insufficient to meet the existing wants and must be used judiciously is referred to as __________. scarcity allocation distribution poverty
scarcity
A major problem faced by developing countries is the relative __________ of drinking water as compared to water in general.
scarcity
the marginal cost of an activity can be found by calculating the change in:
total costs as the level of the activity increases by one unit the total cost subtracoted by the previous total cost
A society's ability to produce needed goods and services is permanently reduced if it?
uses resources too quickly
