9 terms

AP MICRO Chap 1

STUDY
PLAY

Terms in this set (...)

individual choices
decisions by an individual about what to do and what not to do
Four economic principles of Individual Choice
1. Resources are scarce
2. The real cost of something is what you must give up to get it
3. "How much" is a decision at the margin
4. People usually exploit to make themselves better off
Resource
Anything that can be used to produce something else
Scarce
when there's not enough of the resource avalible to satisfy all the various ways a society wants to utilize it
Opportunity cost
the real cost in where you must give up in order to get.
trade off
when you compare the costs with the benefits of doing something
marginal decisions
are decisions about whether to do a bit more or a bit less of an activity
marginal analysis
is the study of marginal decisions
incentives
crucial to change behavior
YOU MIGHT ALSO LIKE...
STUDY GUIDE