Microeconomics: Chapter 3 Optimization
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A set of vocabulary flashcards based on key concepts from Microeconomics Chapter 3: Optimization.
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10 Terms
Optimization
The act of choosing the best feasible option among available alternatives.
Total Value
A method used in optimization that calculates the total value of each feasible option and selects the option with the highest total value.
Marginal Analysis
A technique used to calculate the change in total value when switching from one option to another and uses these comparisons to choose the option with the highest total value.
Optimal Choice
The best feasible option selected after evaluating all alternatives.
Net Benefit
The total benefit from an option minus its total costs.
Commuting Cost
The total cost associated with commuting, including factors such as transportation and opportunity cost of time.
Opportunity Cost
The loss of potential gain from other alternatives when one alternative is chosen.
Marginal Cost
The additional cost incurred when moving from one option to another.
Cost-Benefit Analysis
A process of comparing the costs and benefits of different options in order to make a decision.
Trade-off
The balance between two competing factors, such as cost versus distance when choosing an apartment.
Note 
Flashcards (393)