Ch2SG - Review the Facts A Answers might include rewards of...

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Chapter 2 – Economic Decision Making F2-17 Review the Facts A. Answers might include rewards of money, time, self esteem, and sacrifices might include the same items. B. Opportunity cost is a sacrifice; the cost of what is forgone because a particular alternative is chosen. C. Cost/benefit analysis is the examination of the relationship between rewards and sacrifices. D. Extrinsic rewards come from outside of ourselves while intrinsic rewards come from inside ourselves. E. The relationship between risk and reward refers to the tradeoff between uncertainty and reward. The higher the degree of uncertainty the greater the reward, as risk increases so does the demand for a greater reward. F. Routine decisions are recurring situations where one can create rules for decision making whereas non-routine decisions arise in unfamiliar circumstances and rules are not useful. G. The intuitive processing style requires individuals to solve problems by looking at the overall situation, exploring many possible solutions, and then making a decision based on intuition. The systematic processing style requires problem solving by breaking the problem into parts and then approaching each part in detail. The decision is then made based on analysis and facts.
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F2- 18 Chapter 2 – Economic Decision Making H. The term reasoned decision making involves considering
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