Scarcity
The basic economic problem of having unlimited wants but limited resources.
What is scarcity?
An economy where traditions and customs decide production and trade.
What is a traditional economy?
A market structure with only one seller.
What is a monopoly?
The cost of the next best alternative you give up when making a choice.
What is opportunity cost?
humans often make decisions emotionally, while this type of person in theory makes them logically.
What is an econ?
This term refers to the study of how people allocate scarce resources.
What is economics?
In this system, the government makes all economic decisions.
What is a command economy?
A market with many sellers selling identical products.
What is perfect competition?
Free pizza for attending a school event is an example of this type of motivation.
What is an incentive?
Continuing a bad investment because you’ve “already put in money” is this fallacy.
What is the sunk cost fallacy?
Name one resource that is scarce for both individuals and governments.
What is money, time, or natural resources?
This system is based on supply, demand, and voluntary exchange.
What is a market economy?
A market dominated by a few large firms.
What is an oligopoly?
eeling proud for doing well is an example of an intrinsic incentive, while getting money for doing chores is an example of this.
What is an extrinsic incentive?
People often think a coin flip “is due for heads” after many tails. This is a misperception of ______.
What is randomness?
Scarcity caused not by an absolute lack of resources, but by how resources are distributed or controlled.
What is structural scarcity?
The U.S. has this type of economy, combining government involvement and free markets.
What is a mixed economy?
A market with many sellers but products are differentiated.
What is monopolistic competition?
Incentives can be grouped into two broad types: positive and ______.
What is negative?
ticking with a phone plan because it’s easier than switching is this bias.
What is the status quo bias?
Scarcity forces individuals, businesses, and nations to make these, often involving trade-offs.
What are choices (or opportunity costs)?
Name one advantage and one disadvantage of a command economy.
What are “advantage: equality/stability” and “disadvantage: lack of efficiency/innovation”?
Give one real-world example of an oligopoly.
What are airlines, cell phone carriers, or car manufacturers?
Name one way governments use incentives to change people’s behavior.
What is taxes, subsidies, fines, or rewards?
Following what the crowd does even if it’s irrational is called this.
What is herding?