Microeconomics

downward

In picture form, marginal benefit is shown in a _______ sloping line

Marginal Benefit

Is the additional benefit associated with one more unit of an activity

total benefit divided quantity consumed

Marginal benefit is the change in the _____ _____ _______ by the change in ____ _____

total cost quantity produced

Marginal cost is the change in the ___ ___ divided by the change in the ____ _____

Rational decision making

Self-intrest, marginal decision making, and optimization form the basis for:

decrease

The marginal benefit of the next unit of a good or service consumed will

The marginal benefit equals the marginal cost

The optimal level of economic activity occurs when

mb=mc

The optimal level of output occurs at the point where the marginal benefit of the last unit produced and consumed is equal to the marginal cost of that unit

Marginal Decision making

The process of making choices in increments by evaluating the additional, or marginal, benefit against the additional, or marginal, cost of an action

True

True or false: assuming that people are self-interested recognizes that people will make mistakes.

Opportunity cost

When spending more money on one thing means that you have less money to spend on something else, you have experienced?

Production possibility schedule

a table that shows the possible combinations of two different goods or services that can be produced with fixed resources and technology

welfare economics

attempts to measure how changes in the market changes in the market change society's well being

circular flow model

concisely describes how money and goods flow through the economy

Production possibility frontier

graph that shows the possible combinations of two different goods or services that can be produced with fixed resources and technology

The law of increasing opportunity cost

is a result of the fact that some resources are better suited to produce one good than another

Comparative advantage

is the ability to produce a good at a lower relative opportunity cost than another producer

Marginal cost

is the additional cost associated with one more unit of an activity

Self Interest

is the idea that people choose to do things that provide them some benefit

Optimization

is the idea that people make choices in order to maximize the overall benefit, or utility of an action subject to its cost

upward

marginal cost is shown as an _____ sloping line