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ECON 1 UCSB Summarized Exam Review

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ECON 1 UCSB Summarized Exam Review scarcity - ANS-A situation in which unlimited wants exceed the limited resources available to fulfill those wants economics - ANS-the study of the choices people make to attain their goals, given their scarce resources Three Key Economic Ideas - ANS-1. People are rational 2. People respond to economic incentives 3. Optimal decisions are made at the margin marginal benefit - ANS-the additional benefit to a consumer from consuming one more unit of a good or service marginal cost - ANS-the cost of producing one more unit of a good (change in total cost/ change in quantity) Trade-off - ANS-t

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