HIST 1001 Chapter : What Is History And Stone Age
Document Summary
Rationality decision making process/reasoning: consider options and make a decision based on which one would give you the most satisfaction/benefit. Opportunity cost the benefit forgone of the next-best alternative to the activity you have chosen: always less than the benefit of what you have chosen, the basis of cost/benefit economic reasoning. Marginal thinking: marginal value the additional value you get with increasing amount. The value of the item can change based on circumstance. A politician wants to build a 4th bridge. Based on the information above, 1 bridge costs million but gives. The economic decision rule: if the marginal benefits of doing something exceed the marginal costs, do it, if the marginal costs of doing something exceed the marginal benefits, don"t do it. The method of economics: theories and models. Ceteris paribus - all else equal; a device used to analyze the relationship between two variables while the values of other variables are held unchanged.
