Definitions of Principles of Economic Decision Making
What is Scarcity?
When you don't have enough of something.
Marcelino is dehydrated after a 15 mile run on the beach. There is a scarcity in this natural resource.
What is Water?
What's economy?
The money/wealth a country or region has.
Talia swam for a mile to get away from a crocodile after she fell into a lake. Her incentive was...
What is Life?
What is an incentive?
Something that motivates someone to do something.
Boaz decided to keep playing videogames instead of studying for his Math quiz one night. His benefit and cost were these two things.
What is playing video games and not getting study time for Math test?
For every decision there's a ____ and a _____.
Benefit and a cost.
Marc was walking down the street and someone offered him 200$ for the glasses he was wearing. He was surprised and taken aback. But as he thought about it he remembered someone selling the same glasses online for 225$. However selling it online would take more time then selling it immediately. In this situation Marc had these two choices.
What is sell online or sell to the person in front of him.
What's Opportunity cost?
Opportunity cost is the benefit of the decision you didn’t make.
Marc was walking down the street and someone offered him 200$ for the glasses he was wearing. He was surprised and taken aback. But as he thought about it he remembered someone selling the same glasses online for 225$. However selling it online would take more time then selling it immediately. He decided to sell it to the person in front of him. What was their opportunity cost?
He made less money but saved time.