scarcity
Question: What is scarcity?
Answer: This fundamental economic problem arises because resources are limited but human wants are unlimited.
Question: What is the law of demand?
Answer: When the price of a good goes up, the quantity demanded usually goes down. This is known as this economic "law."
Question: What are marginal benefits and marginal costs?
Answer: Marginal analysis compares these two things when making decisions.
Question: What is change their behavior?
Answer: Incentives are rewards or penalties that motivate people to do this.
Question: What is trade?
Answer: This is the voluntary exchange of goods and services between people or countries.
Question: What are choices?
Answer: Due to scarcity, individuals and societies must make these when deciding how to allocate resources.
Question: What is upward (or to the right)?
Answer: On a standard graph, the supply curve typically slopes in this direction.
Question: What is to do it (or proceed with the action)?
Answer: If the marginal benefit of doing something is greater than the marginal cost, a rational person will make this choice.
Question: What is a negative incentive (or disincentive)?
Answer: A tax on cigarettes is an example of this type of incentive, meant to discourage a behavior.
Question: What is specialization?
Answer: Countries benefit from trade when they focus on what they do best. This concept is known as this.
Question: What is opportunity cost?
Answer: The value of the next best alternative that is given up when a choice is made.
Question: What is the equilibrium price (or market equilibrium)?
Answer: This is the point where the supply and demand curves intersect.
Question: What is marginal cost?
Answer: The additional cost of producing one more unit of a good.
Question: What is a positive incentive?
Answer: Getting a bonus at work for reaching a sales goal is an example of this kind of incentive.
Question: What is comparative advantage?
Answer: A country has this when it can produce a good at a lower opportunity cost than another country.
Question: What are productive resources (or factors of production)?
Answer: Land, labor, and capital are examples of these limited things that contribute to scarcity.
Question: What is a shift to the right?
Answer: An increase in consumer income is likely to cause this shift in the demand curve for normal goods.
Question: What is marginal benefit?
Answer: The additional satisfaction or usefulness received from consuming one more unit of a good or service.
Question: What are unintended consequences?
Answer: Sometimes, incentives can backfire and cause unexpected results. Economists call these:
Question: What are imports?
Answer: Goods brought into a country from another are called this.
Question: What is scarcity example?
Answer: A drought that reduces the wheat harvest is an example of this economic condition in action.
Question: What is a shift to the right (or an increase in supply)?
Answer: If a new technology makes it cheaper to produce smartphones, this happens to the supply curve.
Question: What is marginal analysis?
Answer: A student decides to study for one more hour because the expected improvement in their test grade outweighs the lost hour of sleep. This is an example of this type of analysis.
Question: What is an incentive to promote environmentally friendly behavior?
Answer: Offering tax credits for buying electric cars is an example of this economic tool.
Question: What is increased overall efficiency (or higher standard of living)?
Answer: Trade allows countries to consume beyond their production possibilities, which leads to this main benefit.