Traditional economic theory

1. Opportunity Costs
   What do economists mean by "opportunity cost?" What are your opportunity costs in taking this course?
2. Demand v. Quantity Demanded
   What is the difference between a decline in the quantity demanded and a decline in demand? Given an example of something for which your demand has fallen. Is it an example of a decline in the quantity you demand or a decline in your demand?
3. Behavioral Economics
   Traditional economic theory makes a number of simplifying assumptions that may not always be true, e.g., that people always make rational decisions that are in their own best interest. In recent years a new subdiscipline of economics has emerged called behavioral economics that attempts to employ a more realistic set of assumptions about how people behave to explain economic decision-making.
   Based on information in this link (Behavioral Economics For Dummies Cheat Sheet) present two examples from your own experience that illustrate principles of behavioral economics.

Sample Solution