Marginal Benefit is the additional benefit received from a one-unit change in an activity.
Goods and services are the objects (goods) and actions (services) that people value and produce to satisfy human wants.
Economists seek to answer questions related to resource allocation, production, consumption, and the distribution of goods and services.
Marginal Cost is the additional cost incurred from producing one more unit of a good or service.
The economic way of thinking provides tools for making decisions in all aspects of life, including personal, business, and government.
Marginal Cost is the additional cost incurred from a one-unit change in an activity.
Rational choice is not the same for all individuals; it involves comparing costs and benefits and may not always result in the best choice after the event.
Marginal cost is the opportunity cost of a one-unit increase in an activity, measured in terms of what you must give up to obtain one additional unit.
The scientific method in economics is a systematic approach used by economists to understand and predict the effects of economic forces, beginning with a question about cause and effect based on observed facts.
Marginal cost and marginal benefit analysis is a systematic economic approach used to make better decisions by comparing the additional costs and benefits of a decision.
We must make choices because we face scarcity, which requires selecting from available alternatives.
The Total Opportunity Cost is the sum of money cost (tuition fee and related expenses) and time cost (wage forgone).
The economic way of thinking involves analyzing choices and trade-offs, understanding incentives, and considering the implications of scarcity.
A positive statement is a statement about what is, which can be tested and verified through observation of facts.
An example of a positive statement is 'When the price of kiwi fruit increases, fewer people eat kiwi fruit.'
The value of time spent on an activity, which can be measured in terms of money, particularly in relation to the highest valued alternative forgone.
Cost is defined this way because choosing one option requires forgoing another due to scarcity, making opportunity cost a crucial concept in economics.
Students are required to provide the full spelling of economic terms and write short paragraphs for their explanations in all assessments.
This concept means that making a choice involves giving up one option in favor of another, highlighting the trade-offs inherent in decision-making.
Economics is a decision-making toolkit that provides tools for making decisions in personal, business, and government aspects of life.
The opportunity cost is the highest-valued option forgone for an act or a decision, which includes the wages you would have earned from working and the lower grade earned by not studying.
This statement can be checked using a systematic approach, as it presents a cause-and-effect relationship that can be tested and analyzed.
Critical thinking is thinking that is logical and fact-based, beginning with a question, clarifying it, considering how to answer, identifying potential answers, seeking relevant facts to check those answers, and concluding with a well-reasoned answer.
Scarcity is the condition that arises because resources are limited relative to unlimited human wants.
Total opportunity cost is the sum of money cost and time cost, representing the best alternative use of money and time resources for a given act or decision.
A tradeoff is an exchange that involves giving up one thing to get something else.
Economics is the study of how individuals and societies allocate scarce resources to satisfy unlimited wants.
Economics is the study of how individuals and societies allocate scarce resources to satisfy their unlimited wants.
Scarce resources include the gifts of nature (Land), our labor and ingenuity, and the tools and equipment that we have made.
Total opportunity cost may consist of more than one component, including different classifications of costs such as money cost and the highest valued option forgone.
Economics studies how we make choices in face of scarcity.
Making a Rational Choice involves taking actions where the marginal benefit exceeds the marginal cost until they are equal at the last unit.
It refers to the kind of goods and services that get produced and in what quantities.
Resource constraint refers to the limitations imposed by scarce resources on our ability to satisfy wants.
Factors to consider include the types of resources needed, the amount of resources required, their alternative uses, and the total opportunity cost.
Scarcity refers to the fundamental economic problem of having seemingly unlimited human wants in a world of limited resources.
Choices can be thought of as tradeoffs, where selecting one option means having less of another.
The use of correct economic term definitions is crucial to avoid committing reasoning fallacies such as circular reasoning and ambiguity.
A rational choice is one that uses the available resources to best achieve the objective of the person making the choice, by comparing benefits and costs of alternatives.
The Equi-marginal Principle states that rational choices are made when marginal benefits equal marginal costs at the last unit of action.
The economic way of thinking involves understanding concepts such as scarcity, opportunity cost, and the trade-offs involved in decision-making.
Time is considered a scarce resource, meaning you cannot do everything you want at the same time.
Trade-offs are the alternatives that must be given up when a choice is made, reflecting the concept of opportunity cost.
Economic science begins with a question about an economic event, uses the economic way of thinking to clarify the question, considers how to answer it, identifies possible answers, checks them against facts, and arrives at a well-reasoned answer.
Economists seek to answer questions related to resource allocation, production, consumption, and the distribution of goods and services.
It is an example of a what / how / for whom question.
When an action takes time to complete, the highest valued option forgone during that time must be considered as part of the total opportunity cost.
Marginal Benefit is the additional benefit received from consuming one more unit of a good or service.
It entails determining for whom the various goods and services are produced, including the buyers, users, or consumers.
When Marginal Benefit equals Marginal Cost, it indicates the optimal point of consumption where the consumer is indifferent to buying one more unit.
An example of a positive statement is 'Our planet is warming because of the quantity of coal that we’re burning.'
A reward acts as a 'carrot' that encourages an action, leading individuals to respond positively.
This principle states that individuals are motivated to make decisions based on the incentives presented to them, which can influence their behavior.
Economics is the social science that studies the choices that individuals, businesses, and governments make as they cope with scarcity, all the things that influence those choices, and the arrangements that coordinate them.
Marginal analysis is a method used to compare relevant alternatives systematically and incrementally, focusing on 'more-or-less' decisions rather than all-or-nothing choices.
It refers to how goods and services are produced, including the production methods used.
Yes, tradeoff exists in a one-man economy when a person makes decisions due to scarcity.
Economics provides tools for making informed decisions, understanding market dynamics, and evaluating the consequences of choices in everyday life.
Microeconomics is the study of the choices that individuals and businesses make and the way these choices interact and are influenced by governments.
An example of a normative statement is 'Flood victims should pay for their own rebuilding.'
A challenge is determining what the 'time cost' is, as it can vary case by case and may not always be easily quantified.
An incentive is a factor that changes marginal benefit or marginal cost, leading individuals to alter their actions, which can be a reward (carrot) that encourages an action or a penalty (stick) that discourages an action.
Marginal Analysis is used to evaluate the benefits of an additional unit of production compared to its costs, helping in decision-making regarding resource allocation.
It is measured in terms of other goods or services to show the same level of satisfaction you can obtain from a product.
The expected increase in future income stream, which is a direct gain from the decision to study.
Cost refers to what you must give up to obtain something, emphasizing the sacrifices involved in making choices.
A positive statement is a factual claim that can be tested and validated, such as 'increases in the tax on gasoline increase the price of gasoline.'
'Tradeoff' refers to the choices made when giving up one thing for another, while 'trade' occurs when two or more persons have different values on their possessions in a non-one-man economy.
For simplicity, the concept of time value of money is ignored in the calculation of Total Opportunity Cost.
An example of a normative statement is 'We ought to cut back on our use of coal.'
Total Cost is the overall expense incurred in the production of a certain quantity of goods, including both fixed and variable costs.
By observing changes in incentives, we can predict how choices change, as individuals adjust their behavior based on the incentives they face.
If money is allowed as the unit of measurement, the benefit can be quantified in monetary terms.
This concept indicates that decisions are often made by considering small incremental changes rather than all-or-nothing choices.
Time cost refers to the value of time forgone, which can be measured in terms of money or the value of other goods and services that could have been obtained during that time.
Using layman terms found in general dictionaries or personal wording is not recommended because economic terms are not well defined in those contexts.
Incentives are factors that motivate individuals to make certain choices, influencing their decision-making process.
People make rational choices by comparing the benefits and costs of alternative options and choosing the one that maximizes net benefit.
A rational choice might turn out not to have been the best choice after the fact, as outcomes can differ from expectations.
A framework for decision-making that involves analyzing costs and benefits, including both direct and indirect costs, to make informed choices.
The length of time required for an activity, which can impact the opportunity cost by determining the alternatives that are forgone during that period.
Abbreviations in economic terms are shortened forms of words or phrases used for quick reference in notes and teaching.
Because it allows for easier analysis and comparison, especially in complicated scenarios.
It is an example of a what / how / for whom question.
A normative statement is a statement about what ought to be, which cannot be tested or verified as it depends on values and subjective judgment.
Marginal benefit is what you gain when you acquire one more unit of something, measured by what you are willing to give up to obtain that additional unit.
Macroeconomics is the study of the aggregate (or total) effects on the national economy and the global economy of the choices that individuals, businesses, and governments make.
Diminishing Marginal Benefit implies that as more units of a good are consumed, the additional satisfaction or benefit gained from each additional unit decreases.
The income that could have been earned if an alternative option, such as working, was chosen instead of studying.
In Economics, value is measured relatively in terms of other goods and services, rather than having a built-in value for each good or service.
It illustrates the theoretical concept of 'benefit' in Economics, showing that her satisfaction from drinking coke is at least as much as from coffee.
Benefit is what you gain from a decision or action, representing the positive outcomes of a choice.
Net benefit refers to the difference between the benefits and costs of an alternative option, which should be maximized in making a rational choice.
A normative statement expresses a value judgment about whether a situation is desirable or undesirable, such as 'Flood victims should pay for their own rebuilding.'
Scarcity refers to the limited nature of resources, which forces individuals and societies to make choices about how to allocate them effectively.
Economists, as social scientists, try to avoid making normative statements because they are based on subjective values and cannot be tested.
The financial resources required to pursue a decision, such as tuition fees and related expenses.
Marginal Cost is calculated by taking the difference in Total Cost between two levels of production and dividing it by the change in quantity produced.
Abbreviations are not accepted in assessment answers because students are required to provide the full spelling of terms and detailed explanations.
An action should be taken when the marginal benefit of the action exceeds the marginal cost.
The components of Total Opportunity Cost include money cost (tuition fees and related expenses) and time cost (wage forgone).
Human wants exceed the resources available to satisfy them, leading to economic questions and problems.
Scarcity refers to the limited resources available to meet unlimited wants.
Marginal Cost is the additional cost incurred when producing one more unit of a good or service, calculated as the change in total cost divided by the change in quantity.
A penalty acts as a 'stick' that discourages an action, leading individuals to respond negatively.
The gain or pleasure that it brings, determined by personal preferences and measured by what you are willing to give up to obtain the product.
Knowledge gained or wisdom developed, which may require explanation in words rather than calculation.
Economics provides tools for making informed decisions, understanding market dynamics, and evaluating the consequences of choices in everyday life.
When Marginal Benefit is greater than Marginal Cost, it indicates that the consumer should purchase the additional unit.
Choosing at the margin means making decisions by comparing the relevant alternatives in a systematic and incremental way.
The three fundamental economic questions are: What to produce? How to produce? For whom to produce?
Opportunity cost is the highest-valued option forgone for an act or decision, measured in terms of what must be given up to pursue a particular choice.
The total opportunity cost includes the sum of alternative uses of money and time, such as admission costs and the knowledge forgone from not studying.
This means individuals evaluate the benefits and costs of their options to make informed decisions that maximize their utility.
