Economic ReasoningTest Review

What is any reward or benefit that motivates people to do

something

Incentive

What is a factor or disadvantage that

discourages people from doing something?

Disincentive

What is a tool used to choose among alternatives; weighing

the cost of a product or service against the benefit(s)

it will provide?

Cost/Benefit Analysisor

Risk/Reward Relationship

What is a decision made or course of action taken when

faced with a set of alternatives?

Choice

What do we need to help make a choice turn out the

way we want it to?

Information

What is it called when you consider the benefits and costs of the choices you

make?

Economic Way of Thinking

Should you consider your priority or goals when making

a choice?Yes/No

Yes

When making a choice, should you determine the most benefit for the least

cost?Yes/No

Yes

What is it called when you give up a litter of one thing in

order to get more of something else?

Trade-Off

What is an economic condition created by an

excess of human wants over the resources necessary to

satisfy them?

Scarcity

What is the value of the second-best alternative that a person gives up when making

one choice instead of another?

Opportunity Cost

What does the PACED Decision Model stand for?

ProblemAlternatives

CriteriaEvaluateDecision

Can the PACED Decision-Making Model help you make

better decisions?Yes/No

Yes

An incentive is a

reward

A disincentive is a

punishment

We use disincentives to measure our costs and our

benefits.True/False

False

We use the economic way of thinking to measure our costs

and benefits.True/False

True

What are some examples of limited resources?

Timemoneyspace

What is the problem of having limited resources known as?

scarcity

Choices have consequences.Yes/No

yes

What can be described as what you gave up when

making a decision?

Opportunity Cost

When you make a choice, it does not involve a trade-off.

True/False

False