AREC final scarcity & Opportunity cost

Scarcity

the imbalance between our desires and hte means of satisfying them

Opportunity cost

The value of the next best alternative foregone when a choice is made.

Rational Behavior

The assumption that individuals make decisions aimed at maximizing their utility or satisfaction, given their constraints and available information.

Marginal Benifit(MC)

the value of additional satisfaction or utility gained from consuming one more unit of a good or service.

Marginal Cost(MC)

the value of sacrifice made to obtain an additional unit of an item

MB>MC

A rational person will continue as long as ____

MB=MC

A rational person will when possible continue until _____

Opportunity cost (OC)

The value of the next best alternative foregone when a choice is made.

Economic Resources

Inputs used to produce goods and services Labor, Capital, Natural Resources, Entrepermurship

Fixed

The quantity and quality of economic resources available for use during the year are ______

Two

There are ______ broad classes of outputs we can produce with available economic resources

better adapted

some inputs are ______ to the production of one good rather than the other

TEchnology

_____ is fixed and dosen’t advance during the year