Terms To Be familiar with: Scarcity, Choices, Opportunity Costs, Marginal Benefit, Marginal Cost
How does scarcity play into the choices a person would have to decide on?
What are the differences between monetary and non-monetary incentives?
How would changes in incentives cause changes in behavior?
Explain what Opportunity Costs, Marginal Benefit, and Marginal Cost mean?
1. Scarcity plays into the choices a person would have to decide on because they would possibly have to be more careful in choosing what they produce and use their money for since there is not an unlimited amount of resources that a person can rely on.
ReplyDelete2. The differences between monetary and non-monetary incentives is that monetary incentives are straightforward cash rewards that are consistent and show the employee a consistent form of reward, while a non-monetary incentive is less consistent and are rewards more specific to the jobs and not exactly cash related.
3. Changes in incentives cause changes in behavior because they can affect the motivation of a person whether that be positive or negative so based on what the incentive is, can change the employee to become a better worker or a worse distraction for the workplace.
4. To start, opportunity cost is the benefits lost by making one economic decision over the other. Marginal Benefit is the maximum amount that a consumer will pay for using an additional unit of a product or service. Lastly, a Marginal cost is the change in production cost that results from a business producing one additional item.