Microeconomics: Principles, Problems, & Policies, 20th Edition

Published by McGraw-Hill Education
ISBN 10: 0077660811
ISBN 13: 978-0-07766-081-9

Chapter 1 - Limits, Alternatives, and Choices - Review Questions - Page 22: 1


a. opportunity cost b. utility c. economics d. marginal analysis

Work Step by Step

Opportunity cost is the next-best thing that must be forgone in order to produce one more unit of a given product (pg 5). Utility is the pleasure, happiness, or satisfaction obtained from consuming a good or service (pg 5). Economics is the social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity (pg 5). Marginal analysis is making choices based on comparing marginal benefits with marginal costs (pg 6).
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