ECON 310 Study Guide - Quiz Guide: Opportunity Cost, Marginal Product, Externality
9 Jan 2018
School
Department
Course
Professor
Document Summary
Opportunity cost is the next alternative foregone when the person choose one option in preference of the other. Example if a gardener decides to grow carrots, his or her opportunity cost is the alternative crop that might have been grown for instance tomatoes or onions. When the government spends billion on interest for the national debt, the opportunity cost is the program the money might have been spent on, like education or healthcare. It illustrates the balance between injections and leakages in our economy. Half of the model includes injections, and half of the model includes leakages, the model incorporates households, firms and governments. We additionally have the managing an account framework that encourages the trading of cash and, as we"ll find in a moment, serves to gainfully transform funds into interest keeping in mind the end goal to develop the economy. In the roundabout stream of the economy, cash is utilized to buy merchandise and administrations.
