Overview
Optimization in microeconomics is a fundamental concept that helps individuals and firms make informed decisions regarding resource allocation. By understanding how to maximize utility and minimize costs, economic agents can achieve their goals more effectively. The principles of marginal analysis, ...
Key Terms
Example: Higher utility is achieved when a consumer enjoys their favorite food.
Example: If producing one more chair costs $50, the marginal cost is $50.
Example: An indifference curve might show combinations of apples and oranges that yield equal satisfaction.
Example: A budget constraint might limit a student to buying only two textbooks if they cost $50 each and the student has $100.
Example: A production function might show how many cars can be produced with a certain number of workers and machines.
Example: The market for oranges reaches equilibrium when the quantity supplied equals the quantity demanded.