AP®︎ Microeconomics: Topic 1.5 Flashcards

A decision method that compares expected total benefits with total costs.

The value of the next best alternative given up when a choice is made.

Direct out-of-pocket payments versus forgone income or benefits from using resources differently.

The full satisfaction or revenue gained and the full economic cost incurred at a given choice.

The satisfaction or benefit a consumer receives from consuming goods or services.

The additional benefit and additional cost from one more unit of a good or activity.

As consumption rises, each additional unit eventually provides less extra satisfaction than the previous one.

The difference between total benefits and total costs.

The decision or quantity that produces the greatest net benefit.

Choose the quantity where marginal benefit equals marginal cost, or the last unit before marginal benefit falls below marginal cost.

The total money a firm receives from selling its output.