Economics Flashcard – Part 1

Front

What does a tradeoff mean?

Back

Exchanging one thing for another

Front

What is a rational choice?

Back

Compares costs and benefits to achieve greatest net gain

Front

What is the opportunity cost of something?

Back

The next best alternative forgone

Front

What is a marginal decision?

Back

Deciding whether to work an extra hour of overtime.

Front

The benefit gained from doing a little more of something is called:

Back

Marginal benefit

Front

The cost of doing a little more of an activity is the:

Back

Marginal cost