Flashcard: Fundamentals of Economic Decision-Making — 20 carte

Economics — definition?

Study of choices under scarcity.

Limited resources — examples?

Land, labor, capital, time.

Economic agents — role?

Make decisions on resource allocation.

Micro vs macroeconomics — difference?

Micro: individual markets; macro: economy-wide.

Basic economic problem — cause?

Scarcity of resources versus unlimited wants.

Opportunity cost — definition?

Next best alternative foregone.

Rational decision process — steps?

Identify, evaluate, choose best option.

Engineering economics — focus?

Analyzing project costs and benefits.

Cost-benefit analysis — purpose?

Compare alternatives for best outcome.

Economic environment — influence?

Shapes project feasibility and priorities.

Scarcity — effect on choices?

Requires prioritization and trade-offs.

Economic agents — types?

Households, firms, government.

Microeconomics — focus?

Behavior of individual agents.

Macroeconomics — focus?

Overall economy indicators.

Every project — involves?

Economic decision-making and trade-offs.

Opportunity cost for firms?

Profit from next best alternative.

Rational decision-making — goal?

Maximize objectives systematically.

Engineering economics — tools?

NPV, ROI, payback period.

Cost-benefit analysis — key?

Quantifies trade-offs to select best option.

Economic environment — key factors?

Budget, societal needs, sustainability.