| marginal analysis | marginal costs and benefits that are associated with making a decision |
| consumer choice | economic framework of individual choice (utility function, indifference curves, budget line) |
| opportunity cost | the opportunity costs of using a resource for a given purpose is its value in its best alternative use. the opportunity cost of using four hours to play golf is the value of using the four hours in Larry's next best alternative use. |
| utility function | function expresses the relation between total utility and the level of goods consumed |
| indifference curve | preferences implied by the utility function can be illustrated graphically through indifference curves. pictures all combinations of goods that yield the same utility. |
| budget line | the feasible combinations of (food and clothing) that are attainable given the person's income. |
| managerial implications | this analysis illustrates how the economic framework can be used to analyse and address management problems. managers are interested in affecting the behaviour of individuals such as, employees, customers, and union leaders. |
| only money matters model | only important component of the job is the level of monetary compensation |
| happy is productive model | happy employees are more productive than unhappy employees. managers see as their goal the designing of the work environments that satisfy employees. |
| good citizen model | employees have a strong personal desire to do a good job; they take prize in their work and want to excel. |
| product of the environment model | argues that the behaviour of individuals are largely determined by their upbringing. |
