Give the five foundations of economics. What do you call the factors that motivate you to act or exert effort in microeconomics? What is the definition of markets in microeconomics?

Name: Introduction to Microeconomics 003: Final Study Guide
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Chapter 1: Foundations of Economics Economics – the study of how people, firms, and organizations allocate scarce resources. Microeconomics – Study of individual household and firm decision making. 5 Founds of Econ 1. Life is about tradeoffs 2. Opportunity cost 3. Marginal thinking 4. Incentives matter 5. Trade creates value Opportunity Cost – the cost of something is what you give up to get it The “next best option” What you gave up for something else Marginal Change – an incremental adjustment that results from doing one thing Marginal Benefit – the benefit gained from doing an action Marginal Cost – the cost from doing that one action Belief: People are rational People