ECON 211 Ch.3 Dynamic Study Module
marginal analysis
A cost-benefit calculation that focuses on the difference between a feasible alternative and the next feasible alternative is called ___________________________________.
measuring spending of a family after an increase in income
An example of before and after comparisons is:
choosing more of one good and less of another no longer increases net benefits
An optimizer maximizes total net benefit when:
comparing outcomes before and after a change in some variable
Comparative statics is:
marginal analysis
Decision analysis that involves comparing marginal costs and marginal benefits to determine the best course of action is known as:
moving will save $600 in rent $400 in commuting
If the marginal mortgage cost of moving from house A to house B is $-600 and marginal commuting cost of moving is $400, then:
decreases by $300
Investment A has a cost of $500, and a benefit of $1,000; Investment B has a cost of $200, and a benefit of $400. If a change is made from Investment A to Investment B, then the net benefit:
a cost-benefit calculation that focuses on the difference between a feasible alternative and the next feasible alternative
Marginal analysis is:
evaluate the marginal cost and marginal benefit of that decision
One of the first steps in deciding whether to complete your education is to:
identifying particular situations in which agents fail to optimize
One topic of behavioral economics is:
selecting the feasible option that maximizes benefit, given available information
Optimizing is:
provide incentives to allocate resources
Prices in the marketplace:
normative analysis
The advice an economist gives people how to better optimize is tantamount to:
optimum
The best feasible choice is called the:
optimum
The best feasible choice that a person can make is known as the ________________ choice.
trade-offs
The complexity of optimizing centers around:
makes them as well off as possible
The goal of an optimizer is to select the option that:
levels; differences
The two methods of optimizing presented in this chapter are optimization in _____________ and _______________________.
negative; zero
Total benefit falls when marginal benefit is _________________ and benefit is maximized when marginal benefit is __________.
Behavioral Economics
What do economists call the study of situations in which people act in ways that do not appear to be economically rational?
Marginal Analysis
What is defined as a cost-benefit calculation that focuses on the difference between a feasible alternative and the next feasible alternative?
comparative statics
When we evaluate outcomes both before and after a change in some variable it is known as:
differences
When you optimize in __________________________ you evaluate the change in utility that would result from selecting one option over another option.
levels
When you select the option that generates the highest total benefit you are optimizing in:
Economic agents that evaluate more data are more successful at optimizing.
Which of the following is not true?
multiply the costs and the benefits to eliminate overlapping costs and benefits
Which step is not present in optimization levels:
