MICRO - Appendix A Flashcards

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  1. Scarcity
    The problem that arises because we all have limited money, time, and energy. Every choice involves a trade off.
  2. Opportunity Cost
    The cost of best alternative given up.
  3. Incentives
    Awards and penalties for choices
  4. Three Keys to Smart Choices
    1.Opportunity Cost Rule 2. Look Forward Only to Additional Benefits and Additional Opportunity Costs. 3. Implicit costs and Externalities Count, Too.
  5. Voluntary Trade
  6. Absolute Exchange
    Ability to produce product at lower absolute cost then another producer.
  7. Comparative Advantage
    Ability to produce product at a lower opportunity cost then another producer.
  8. Circular Flow of Economic Life
    (PICTURE pg. 402)Image Upload 1
  9. Micro Economics
    Analyzes choices that individuals in households, individual businesses and governments make, and how this choices interact in markets.
  10. Macro Economics
    Analyzes performance of the whole Canadian economy and global economy - the combined outcomes of all individual micro-economic choices.
  11. Negative Externalities
    Cost that affect others who are external to choice or trade. These should be included in making smart decisions.
  12. Positive Externalities
    Benefits that affect others who are external to a choice or trade.
  13. Smart Choice
    The value of what you give up must be less then the value you get.
  14. Marginal Benefits
    Additional benefits from next choice
  15. Implicit Costs
    Opportunity costs of investing your own money or time.
Card Set
MICRO - Appendix A Flashcards
For ECON 100
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