Basic Economic Concepts

These flashcards cover essential vocabulary and concepts from the lecture notes on basic economic principles, including opportunity cost, trade-offs, marginal analysis, and more.

Opportunity Cost

The most desirable alternative given up when a choice is made.

Trade-Offs

All the alternatives we give up when we make a choice.

Marginal Analysis

The study of decisions made by assessing additional benefits and costs.

Economic Decision-Making

Making choices that involve trade-offs and opportunity costs.

Economic Relevance

Understanding how economic concepts impact real-life decisions.

Guns & Butter

A metaphor describing the trade-off between a nation's investment in defense and civilian goods.

Marginal Benefit

The additional benefit received from consuming one more unit of a good or service.

Marginal Cost

The additional cost incurred from producing or consuming one more unit of a good or service.

Rational Choice

Making decisions based on the best outcome for self-interest.

Average Wage Growth

An increase in wage rates over time, reflecting economic change.

Concert Opportunity Cost

The total cost of attending an event, including lost income and ticket price.

Thinking at the Margin

Analyzing additional benefits and costs when making decisions.