Foundations
This is the study of how people make choices given limited resources.
What is economics?
In addition to tangible, money-based costs and benefits, a CBA must also include this.
What are intangible costs and benefits (non-monetary)?
This refers to something that is desired but not necessary.
What is a want?
These are used to shape a person's behavior and can be positive or negative.
What are incentives?
This type of economy includes competition, consumer choices, and mostly private ownership of business. NOTE: multiple answers possible.
What is free enterprise, capitalist, market?
This refers to the way money isn't used up, but rather moves between businesses and consumers. HINT: From the 2nd Econ for Dummies reading.
What is the circular flow of economics?
All choices involve giving up one thing to get another. This is the term for that reality. NOTE: We read a New York Times article about these.
What are trade offs?
The next best alternative defines this.
What is opportunity cost?
This is the extra profit or satisfaction gained from producing or consuming one more of something. HINT: From a lecture.
What is the marginal benefit?
These questions answer the fundamental problems in economics. How they are answered partially determines what type of economic system is used.
What should be produced?
How should it be produced?
For whom should it be produced?
This person takes risks and starts new businesses.
What is an entrepreneur?
The economist, Keynes, suggested eight principles of economic thinking. This is one of them. NOTE: multiple answers are possible.
What is scarcity forces choices, people try to make good choices, we are influenced by pressures around us, etc.