Microeconomics Ch-1

Opportunity Cost is:

• The additional benefit of buying an additional unit of a product.

• That which we forgo, or give up, while making a choice or a decision.

• The cost incurred in the past before we make a decision about what to do in future

• A cost that is borne in terms of discomfort and pain while supplying factors of production.

The opportunity cost of watching a movie will be equal to:

• The time lost while watching the show.

• The pleasure enjoyed by watching the show

• The amount paid to buy the tickets.

• The pleasure that could have been enjoyed watching TV instead.

Economics is

• The study of stocks and bond market.

• The study of Management decisions.

• The problem of choice under scarcity.

• Mainly the study of business firms.

Government-provided healthcare increases public expenditures.

• Normative Economic Statement

• Positive Economic Statement

Working citizens should not pay for hospital care.

• Normative Economic Statement

• Positive Economic Statement

Economies where the economic activities are firmly controlled by government.

• Centrally Planned Economy

• Market Economy

• Mixed economy

Economies where the economic activities are controlled by the market forces.

• Socialist Economy

• Mixed economy

• Capitalist Economy