Scarcity, trade off, opportunity cost

Poor scarcity means that it is not enough to avoid it. All resources are limited. Therefore, it is necessary to decide ways to make maximum use of natural resources, workers and capital. Even the US government must make a choice. It can not do everything people want.

2. Reviewing the trade - off means to give up one thing to get another. For example, the government has to decide whether to use 1 billion dollars for education or 1 billion dollars for defense. Rarity is what forces us to choose as a society. Society must decide 1) what kind of goods and services are to be produced, 2) how to produce these goods and services, and 3) who should receive these goods and services.

3. Opportunity cost to make a choice - There is always some cost for any choice. Therefore, we abandoned the opportunity to acquire Project B by spending a certain amount on Project A. For example, by receiving a loan from a university to pay for the tuition fee of the university, you work and renounce the opportunity to earn money. Whenever you make an economic choice, you need to give up or weigh, you have opportunity cost

4. Decrease in marginal income is a continuous unit in which consumer preferences do not change in a short period of time. The preferred utility of each additional unit decreases. Someone came up with an example

Economists economists make living by making a living and studying the national economic system or its various parts. He or she will collect data and then try to present a summary of economic outcomes. Then he built a model to predict generalization based on some assumption.

6. Macroeconomics Some problems are related to the impact of changes to the entire economy, not individual parts. For example, what is the impact of increasing federal spending on consumer spending and federal budget? Microeconomics Some problems include the impact of economic power on various parts of the economy such as commercial companies, families, workers and others. For example, what happens to the company's sales as the price goes up?

Production potential frontier simplifies complex economies to emphasize some basic but powerful ideas: lack of efficiency, trade-offs, opportunity costs and economic growth. When studying economics, these ideas are reproduced in various forms. Production potential frontier provides an easy way to think about them. 33 Changing the Probability of Production With the technological advances in the computer industry, the economy has been able to produce more computers for a certain number of cars. As a result, the boundaries of production possibilities move outward. When the economy moves from point A to point G, the production of automobiles and computers will increase.

The concept of trade-off due to shortage is formulated by the concept of opportunity cost. The opportunity cost of choice is the value of the best option for abandonment. In other words, if you can only produce bottled soda and water, the opportunity cost of producing bottled soda is worth the bottle of soda. In the same way, everything has opportunity costs. The opportunity cost to read this is that you can spend your time (like watching a movie). When scarce resources are used (almost all are scarce), people and companies are forced to choose at opportunity cost.

Based on the definition of resource shortage in economics, opportunity costs can be thought of as a result of resource shortage, as shortages require tradeoffs and tradeoffs that bring opportunity costs. Specifically, the cost of an item or service is usually measured from a financial point of view, and the opportunity cost can be regarded as the result of "getting a choice". (When there are two or more choices that people decide). For example, a 20 pound person can buy cloth or buy dinner. If she buys cloth, opportunity cost is dinner. In contrast, if she pays for dinner, the opportunity cost is cloth. Even if you have more than one choice, opportunity costs should be one item, not all.