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