Econ 200

sunk costs.

Amancio is going into his fourth year of school when he is offered a prestigious position at a software company. Instead of applying the opportunity cost principle to see if he should quit school and take the job, he decides to stay in school, because he has already spent so much time and money on furthering his education. Amancio's hasty decision has been negatively affected by:

$5

If a buyer's willingness to pay for an item is $12, and the buyer purchases the item for $7, what is the buyer's economic surplus?

more than it boosts total cost.

If the marginal benefit of hiring an extra worker exceeds the marginal cost of the worker, then hiring the worker will boost the total benefit:

His opportunity cost is lower than that of healthy people.

Matthew has been diagnosed with cancer and doctors estimate that he has roughly 5 months to live. From an economic standpoint, which BEST explains why Matthew might be more likely than a healthy person to take a risky experimental drug?

Opportunity Cost Principle

The _____ helps people make better decisions by forcing them to focus on the real trade-offs they face.

Opportunity Cost

When someone considers alternatives and all different options available to them before making a decision, they are taking into account the _____ principle.

Cost-Benefit Principle

When you confront a problem, which of the four economic principles should you consider second?

The financial profits need to be at least as large as the opportunity cost of the investment of your time and money.

Why do you need to do more than just calculate whether a financial profit will be made when you are deciding whether to start a new business?

Economic Surplus

_____ is a measure of how much a decision has improved the decision maker's well-being.