Econ Ch. 1-3 Matching
| What is the incentive principle? |
| Incentives are central to people's choices |
| Buyer's Reservation Price |
| The highest price an individual is willing to pay for a good |
| (Total cost) / (number of units) |
| Increase in total cost from one addition unit of an activity |
| What is the key to using the Cost-Benefit Principle correctly? |
| Recognizing what taking an action prevents us from doing |
| The quantity at which the supply and demand curves intersect |
| Someone with well-defined goals who tries to fulfill those goals as best they can |
| Illustrates the quantity of a good that sellers are willing to offer at each price |
| Costs that cannot be recovered |
| When a person can perform a task with a lower opportunity cost than another person |
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