study guide chapter 1
fundamental concepts in economics are
- opportunity cost -marginalism -effective markets
The principle that irrelevant detail should no be included In a model is know as
Ockham's razor
opportunity cost can be best defined as
The value of the best alternative given up when making a choice.
The concept of opportunity cost
can be applied to the analysis of any decision making process
if we wish to observe the effect that an increase in X has on Y as long as nothing else is changing, then we are making the assumption of
ceteris paribus
sunk costs are
costs that cannot be avoided because they have already been incurred
scarcity is the reason that opportunity costs arise
false
The branch of economics that examines the fuctioning of individual industries and the behavior of individual decision-making units is
microeconomics
Economic desicions have affected the
physical environment, character of society, nature and number of jobs, level of material welfare
there is great concern over the fact that millions of Americans still do not have health insurance. A study of the costs and benefits of implementing a national health-insurance program is an example of
positive economics
marginal cost is best defined as
the cost of producing one more unit of output