Carefully define the following terms, and explain their importance in economics

a. opportunity cost
b. abstraction
c. theory
d. model
e. marginal analysis

a. Opportunity cost for a decision is the value of the next best alternative which one has to give up because of that decision. It is central to rational thinking and economic analysis.
b. Abstraction is ignoring many details in order to focus on the most important elements of a problem. The appropriate degree of abstraction depends on the topic under consideration.
c. Theory is a deliberate simplification of relationships with the purpose of explaining how those relationships work. Theory is cause-and-effect reasoning.
d. A model is a simplified, small-scale version of some aspect of the economy. Much economic analysis employs models of one or more parts of the economy.
e. Marginal analysis is making decisions based on a comparison of the increase or change in benefits to the increase or change in costs when making some sort of change.