Period 1 terms

Question 1

Issue

Answer 1

Is not an event, is ongoing, has long term effects, is something we can do something about, is something with TWO or MORE sides.
Eg.gun laws

Question 2

Public policy

Answer 2

Another word for rules and laws.

Eg.dress code

Question 3

Incentive

Answer 3

Rewards for behavior.

Eg.candy, money, materials.

Question 4

Disincentive

Answer 4

Deterrent or punishment for behavior.

Eg.grounding, jail

Question 5

Scarcity

Answer 5

Limited resources, unlimited wants, if nobody wants it it is not scarce.
Eg.gold, water, coal

Question 6

Choice

Answer 6

Choosing is refusing, scarcity causes us to choose.

Eg.what you want to buy with $50(limited resource) choice 1:shirt, choice 2:video game, choice 3:invest

Question 7

Rational choice

Answer 7

Choosing in own best interest, as you perceive them.

Eg.bf-gf would not be same option as others

Question 8

Value

Answer 8

Based on tastes and preferences. The greater the supply the lower the price. *buyers willingness to pay.
Eg.xbox 1

Question 9

Cost or opportunity cost

Answer 9

Highest value later alternative. The value of the next best choice.
Eg.pam or Jennifer, video game or shirt

Question 10

Price

Answer 10

Willingness of buyer and ability of the buyer to purchase a product.
Eg. Ferrari but can’t pay bills or feed family

Question 11

Cost/benefit analysis

Answer 11

Compares benefits generated by an activity with its opportunity cost of production. The rule is benefits exceed costs than the activity is efficient and should be undertaken.
Eg.always a cost when you choose

Question 12

3rd party/externalities

Answer 12

Spillover, costs or benefits that are captured in an exchange effecting others.
Eg. Car and gas=pollution

Question 13

Marginal analysis

Answer 13

Next or additional, people don’t make choices all or nothing. How hard is it to get to the next unit?
Eg.