Choice & Decision-making
A school has funds for either a new computer lab or a new sports field this year, but not both. Making this decision is an example of this.
What is "choice"?
A Telegram group connects dozens of farmers and restaurant owners to buy and sell eggs every morning—no single building, but trades happen daily.
What is a "market"?
When the price of movie tickets rises from 40,000 so’m to 60,000 so’m, fewer people buy tickets that weekend.
What is “quantity demanded decreases”?
In Ozodistan’s cotton oil market, three firms raise prices in the same week and shop owners say they “moved together.”
What is collusion?
Factory smoke/dust harming neighbors is an example of this.
What is a negative externality?
You can either work a Saturday shift for 200,000 so’m or study for a midterm. If you choose the shift, the main thing you give up is the benefit of studying.
What is opportunity cost?
After a sudden storm, bottled water becomes scarce. In one store, the price jumps from 5,000 so’m to 15,000 so’m. This price change provides this to consumers.
What is information?
At 22,000 so’m per kilo of tomatoes, vendors sell everything they brought and customers can still find tomatoes—no leftover crates and no long lines.
What is the equilibrium / market-clearing price?
Customers complain about high prices and weak service, but they have few real alternatives because one provider controls most of the market.
What is a monopoly?
A city installs streetlights on a public road. Even people who don’t pay directly still benefit from the light
What is a public good?
If the city spends more money on new roads, it has less money available for parks or schools.
What is a trade-off?
A city clinic has 50 same-day appointments. When the price of a visit rises, fewer people can afford it, and the limited appointments go mainly to those who can pay. This is prices doing the function of ______.
What is rationing?
The government sets a maximum price for cooking oil at 18,000 so’m/liter, but at that price stores sell out quickly and customers line up.
What is a shortage?
In one market there is one dominant seller; in another there are three big sellers. The pattern of how many firms control the market is its ______.
What is market structure?
In a tax system, high earners pay 20% of their income while low earners pay 5%.
What is a progressive tax?
A bakery uses the same staff and ovens, but increases output from 500 to 650 loaves per day after reorganizing the workflow.
What is productivity?
A bakery raises the price of bread from 4,000 so’m to 6,000 so’m. The next week, the bakery produces more loaves because profit per loaf is higher. This price change creates this for producers.
What is an incentive?
The government guarantees farmers 3,400 so’m/kg for wheat, but mills only want to buy a smaller amount at that price and wheat piles up in storage.
What is a surplus?
Three major mobile-phone companies offer very similar monthly plans, and together they control most of the market. A market controlled by a small number of big firms is called a ______.
What is an oligopoly?
A neighborhood pays for mosquito control near one apartment building. Nearby buildings also get fewer mosquitoes even though they didn’t pay.
What is a positive externality?
If households switch from beef to chicken when prices rise, chicken is acting as a ______
What is a substitute?
A store hires workers and pays wages; households use that income to buy groceries from the store. These back-and-forth money flows are described by the ______.
What is circular flow?
After a new tax, fewer buyers and sellers make deals even though some trades would benefit both sides. The “lost” trades are called _________.
What is deadweight loss?
A government investigation/fines meant to stop coordinated pricing and restore competition is an example of ______.
What is antitrust?
A 10% sales tax takes a bigger share of a low-income family’s budget than a high-income family’s budget.
What is a regressive tax?