Marco Exam 1

Efficiency

-Society getting the maximum benefits

from its scarce resources

-Size of the economic pie

Equality

-Distributing economic prosperity uniformly

among the members of society

-How the pie is divided into individual slices

Rational People

-Systematically and purposefully do the

best they can to achieve their objectives

Marginal Changes

Small incremental adjustments to a plan of

action

Rational Decision Maker

-Make decisions by comparing

marginal benefits and marginal

costs

– Take action only if:

Marginal benefits is greater then Marginal costs