There are gains from trade.
Economy-wide interactions.
It means that rational individuals make decisions by evaluating the costs and benefits of marginal changes.
Whether it would be enough to change behavior.
It illustrates the concept of making a choice among alternatives.
A comparison of costs and benefits.
$6 per hour.
$7.
$18.
Babysitting at $7 per hour and working at the college library at $6 per hour.
$12.
They provide a framework for understanding how economic agents make choices.
Considering the additional benefits and costs of a decision.
Incentives are central to people's choices.
They provide goods and services to others and receive goods and services in return.
Each person focuses on the task they are good at performing.
People buy more fuel-efficient cars.
More students go to college.
They get more of what they want.
Deciding how much time to spend studying for an exam.
$7, which is the wage from babysitting.
The American Economic Association (AEA) website.
The knowledge that they can find desired goods and services in the market.
$600.
$6.
$7, which is the higher wage from babysitting.
$25.
The principles that guide economic decision-making.
Opportunity cost.
Its opportunity cost.
The idea that people respond to incentives in predictable ways.
To reduce plastic bag usage in the city.
Stores should charge a fee for using a plastic bag.
Charging 5 cents for plastic bags.
Choosing to study for an exam instead of going to the movies.
Because resources are scarce.
The principle of opportunity cost.
They choose to produce certain products.
Comparing the costs and benefits of doing a bit more of an activity versus doing a bit less.
Resources are scarce.
A nickel tax.
It means that rational individuals make decisions by comparing the additional benefits and costs of a choice.
It indicates that the marginal benefit is less than the marginal cost, suggesting an unfavorable decision.
As efficiently as possible.
Markets usually lead to efficiency.
The quantity available isn’t large enough to satisfy all productive uses.
It encourages the use of reusable bags and reduces reliance on plastic bags.
Opportunity cost = Explicit cost + Implicit cost.
Forgoing some other alternative.
The value of time you could have spent elsewhere.
How individuals make choices.
People can specialize in producing one good or service and exchange it for other goods.
What you must give up to get it.
There are gains from trade.
Anything that can be used to produce something else.
$5700.
$7.
$7.
Natural resources, human resources.
At 3 launches ($5 marginal benefit and $5 marginal cost).
The monetary value of any other sacrifices made (next best alternative).
Yes, all costs are opportunity costs.
Trade allows individuals or countries to specialize and benefit from exchanging goods and services.
To change consumer behavior regarding the use of disposable bags.
Incentives guide individuals towards choices that align with their interests.
How much of it you need.
The economy can produce more when individuals specialize and trade.
Because it is a sunk cost and does not affect current decision-making.
Rewarding customers with 5 cents for bringing a reusable bag is generally considered more effective.
$600.
No, because the total cost of repair ($1600) exceeds the value of the car if repaired ($6000).
What you must give up (next best alternative) to get an item you want.
Foregone wages.
How these choices interact.
Resources are scarce.
A decision at the margin.
They aim to do the best they can to increase their well-being.
They evaluate the marginal benefits and marginal costs of their actions.
Consumers may choose to reduce plastic bag usage if faced with fees or rewards for using reusable bags.
$7.
Store managers.
$8.
The benefit and costs of that additional hour spent on studying.
Comparing the costs and benefits of alternative choices.
Trade-offs.
People usually respond to incentives.
An example could be a reward system that encourages students to improve their grades.
It indicates that the marginal benefit is greater than the marginal cost, suggesting a favorable decision.
Markets move toward equilibrium.
Time, income, land, labor, capital.
$6000.
Government intervention.
No, because selling 'as is' for $5700 is better than spending $600 to repair it.
$5500.
The fees and foregone wages versus the extra income from the additional year of education.
The price of the ticket.
Marginal thinking.
An opportunity to make yourself better off by changing your behavior.
The enjoyment you could have derived from other alternatives.
What you forgo by not choosing your next best alternative.
Babysitting at $7 per hour and working at the college library at $6 per hour.
Rewarding customers with 5 cents for bringing a reusable bag.
$5500.
$7 (the highest wage she could have earned).
4 launches, as it maximizes net benefit.
$6 per hour.
The value of the next best alternative forgone.
The decision by an individual of what to do and what not to do.
They increase overall economic efficiency by allowing resources to be allocated more effectively.
Incentives motivate individuals to change their actions or decisions.
My choices affect your choices, and vice versa.
They change their behavior based on the incentives presented.
It allows people to get more of what they want and be better off.
They take advantage of opportunities to make themselves better off.
$6500.
Stores are required to reward consumers for bringing their reusable bags.
It refers to the next best option you could have chosen instead.
Budget and living space.
A tradeoff – comparison of costs and benefits.
Choose which products to buy and which to leave on the shelf.
It creates a financial disincentive to use plastic bags.
$1600 ($1000 repairs + $600 for transmission).
$1600 ($1000 in repairs + $600 for transmission repair).
$32.
$7 per hour.
Any actual monetary amount paid.
Tuition, books, and fees.
3 launches, where marginal benefit equals marginal cost.
They influence the choices individuals make.
Choosing one option means giving up another.
Both parties benefit from the trade.
The concept of marginal analysis.
The cost and benefit of the marginal repair, such as the transmission.
At 4 launches, total benefit is $22 and total cost is $20.
$12.
Its opportunity cost.
$13, which is the sum of the wages from both jobs ($7 + $6).
Incentives.
The principle of voluntary exchange.
