ECON 2106 Principles
of Microeconomics Ch.
1 (questions and
answers)
Four Core Principles of Microeconomics - answer - cost-benefit principle
-opportunity cost principle
-marginal principle
-interdependence principle
Cost-Benefit Principle - answer Costs and benefits are the incentives that
shape decisions. You should evaluate the full set of costs and benefits of any
choice, and only pursue those whose benefits are at least as large as their
costs.
Quantifying Costs and Benefits - answer Convert costs and benefits into
dollars by evaluating your willingness to pay
Willingness to Pay - answer the maximum amount that a buyer will pay for a
good
Economic Surplus - answer the total benefits minus total costs flowing from a
decision
Framing Effect - answer When a decision is affected by how a choice is
described, or framed. You should avoid framing effects altering your own
decisions.
of Microeconomics Ch.
1 (questions and
answers)
Four Core Principles of Microeconomics - answer - cost-benefit principle
-opportunity cost principle
-marginal principle
-interdependence principle
Cost-Benefit Principle - answer Costs and benefits are the incentives that
shape decisions. You should evaluate the full set of costs and benefits of any
choice, and only pursue those whose benefits are at least as large as their
costs.
Quantifying Costs and Benefits - answer Convert costs and benefits into
dollars by evaluating your willingness to pay
Willingness to Pay - answer the maximum amount that a buyer will pay for a
good
Economic Surplus - answer the total benefits minus total costs flowing from a
decision
Framing Effect - answer When a decision is affected by how a choice is
described, or framed. You should avoid framing effects altering your own
decisions.
