ECONOMIC THINKING
This happens because resources are limited, forcing people and governments to make choices.
What is scarcity
The point where supply and demand are equal.
What is market equilibrium
Payments made by individuals and businesses to fund public services.
What are taxes
The exchange of goods and services between countries.
What is international trade
Money earned after all costs are paid.
What is profit
The next best thing you give up when making a decision.
What is opportunity cost
This term describes reasons that encourage consumers or businesses to act. (Example: the government gives $ back if consumers buy an electric vehicle)
What are incentives
This policy uses government spending and taxation to influence the economy.
What is fiscal policy
Taxes placed on imported goods.
What are tariffs
This issue asks whether businesses should value low costs more than worker job security.
What is ethics in economics
This term describes money already spent that cannot be recovered.
What is a sunk cost
People or groups affected by economic decisions are called these.
What are stakeholders
This policy uses interest rates and money supply to influence the economy.
What is monetary policy
Limits placed on the amount of products that can be imported.
What are import quotas
When workers lose jobs because businesses are cutting costs or slowing production.
What is unemployment
This happens when the satisfaction from each additional item decreases over time.
What is diminishing marginal utility
Hidden costs or benefits not included in the price are called these.
What are externalities
Government-set limits on prices are called these.
What are price controls
This occurs when a country exports more than it imports.
What is a trade surplus
Low prices often increase this, while fair treatment and sustainability may reduce it.
What is profit
This occurs when output is maximized while waste is minimized.
What is economic efficiency
When a business owner keeps operating only because they already spent money, they are ignoring this concept.
What is sunk cost
Balancing fairness and profitability in decision-making relates to this concept.
What are ethics in economics
Selling products in another country below normal prices to beat competitors.
What is dumping
When a country depends heavily on goods and services from other countries.
What is globalization