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The study of how individuals or societies choose to use the scarce/limited resources to try to satisy their unlimited wants. study of choice |
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Principle 1 Resources are scarce |
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Definition
| quantity available isn't large enough to satisfy all productive uses |
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Principle 2 The Real Cost of Something is what you must give up to get it |
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- Real cost is the oppurtunity cost
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Term
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Definition
- What you must give up in order to get what you want
- Cruicial to understanding individual choice
- giving up a job to go to school
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Term
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Definition
- Costs that occured in the past and can't be recovered anymore, the exist no matter whether a certain activity is conducted or not.
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Principle 3 "how much" is a decesion at the margin |
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Definition
- You make a trade off when you compare the costs with the benefits of doing something
- decesion of doing a bit more or a bit less
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