| Term | Definition |
|---|
| trade-off | the act of giving up one benefit in order to gain another, greater benefit |
| guns or butter | the idea that a country that decides to produce more military goods has fewer resources to produce consumer goods and vice versa |
| opportunity cost | the most desirable alternative given up as the result of a decision |
| thinking at the margin | the process of deciding whether to do or use one additional unit of some resource |
| cost/benefit analysis | a decision-making process in which you compare what you will sacrifice and gain by a specific action |
| marginal cost | the extra cost of adding one unit |
| marginal benefit | the extra benefit of adding one unit |
Combine with other sets
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