Incentives Matter!

Front

Something that motivates someone to do or not do something

Back

incentive

Front

What someone pays (money)

Back

cost

Front

The next best thing that a person gives up to do something else (the second choice)

Back

opportunity cost

Front

Something good that someone receives when they do something

Back

benefit

Front

When the price of something goes up, consumers will demand less of that thing

Back

Law of Demand

Front

When the price of something goes up, producers will supply more of that thing

Back

Law of Supply

Front

This means "additional"

Back

marginal

Front

The added payment or lost opportunity of producing or consuming one more item

Back

marginal cost

Front

The added "goodness" of producing or consuming one more item

Back

marginal benefit

Front

A way to determine who gets the available resources, goods and services

Back

rationing device