Economic Reasoning
Test 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 Analysis
or
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?
Problem
Alternatives
Criteria
Evaluate
Decision
Can the PACED DecisionMaking 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?
Time
money
space
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