Microeconomics limits alternatives choices
The answer is in the question: it is a million dollars….
The scarce resources are the plant and the labor at the plant. The emphasis economists place on opportunity cost, the idea that people make choices that maximize the value of objectives that serve their self-interest, and a focus on the effects of small changes are ideas of great power.
Chapter 1 limits alternatives and choices answers
The manager of an automobile assembly plant is considering whether to produce cars or sport utility vehicles SUVs next month. Three features distinguish the economic approach to choice from the approaches taken in other social sciences: Economists give special emphasis to the role of opportunity costs in their analysis of choices. A good that is not scarce is a free good. Is rational self-interest the same thing as selfishness? Chapter 5 Government's Role and Government Failure details the factors that cause government failure. He must choose between these alternatives. If individuals are maximizing their level of satisfaction and firms are maximizing profits, then a change in the set of alternatives they face may affect their choices in a predictable way. Buchanan and George F. A common response to this recommendation is that a higher price would have no effect on water consumption, because water is a necessity. We like the idea of a bargain.These economic principles are incorporated into models Economic theories are developed to explain the behaviour of economic agents 10 Three Important facts about economic principles Generalizations Other-things-equal assumption aka ceteris paribus Graphical expression 11 1.
Is the rate of inflation increasing or decreasing?
Distinguish between microeconomics and macroeconomics. Economists refer to this sacrifice as an opportunity cost. The opportunity cost of using the land as a housing development is the forgone value of preserving the land.
The price of asparagus is too high.