A situation in which unlimited wants exceed the limited resources available to fulfill those wants
simplified versions of reality used to analyze real-world economic applications.
Using all available information to achieve your goals.
Comparing MC and MB is known as Marginal Analysis.
|The highest-valued alternative given up in order to engage in some activity||
|governments decide what to produce, how to produce it, and who received the goods and services.||
Centrally planned economies
|decisions of households and firms determine what is produced, how it is produced, and who receives the goods and services.||
|A group of buyers and sellers||
|Most economic decisions result from the interaction of buyers and sellers, but governments play a significant role in the allocation of resources.||
|where goods or services are produced at the lowest possible cost||
|where production is consistent with consumer preferences: the marginal benefit of production is equal to its marginal cost||