ECTEST REV 1

Scarcity

• You´re not able to satisfy all wants at once, because resources are limited

• Things that encourage/motivate a buying decision

Incentives

• You´re not able to satisfy all wants at once, because resources are limited

• Things that encourage/motivate a buying decision.

Two types of incentives: Non-monetary

• emotional: feel safe, feel posh, feel happy

• Saving money/good deal

Oppertunity Cost:

• Things you give up when making a decision

• Sliding scale compromise between two points

Trade-off

• Sliding scale compromise between two points (money saved v money spent)

• Things you give up when making a decision

How does supply affect price?

• Supply increases —-> Supply decreases

• Supply decreases —-> Supply increases

Supply

• Amount of a good producers are willing/able to sell at a given price

• Sliding scale compromise between two points

• Things you give up when making a decision

Demand

• Things you give up when making a decision

• Amount of a good producers are willing/able to buy at a given price

Two types of Incentives: Monetary

• Saving money/good deal

• emotional: feel safe, feel posh, feel happy