Compare and contrast two events motivated by incentives, one where the self-interested behavior was good for society and the other where it was bad. Make sure to use some of the economic terms from the semester.

Economic terms:

Incentives Self-interest Responsible Stewardship

Money Unit of account Medium of exchange Store of wealth Money supply Barter Liquidity Banks (financial intermediaries) Central bank

Profit-maximizing rate of production Marginal revenue Marginal costs Short run Long run Total costs Average total costs Fixed costs Variable costs SR shutdown price Perfect competition Monopolist Natural monopoly Monopolistic competition Oligopoly Price elasticity of demand Price discrimination Business cycle Inflation Price index Labor force Unemployment Target rate of unemployment Aggregate income Aggregate production Recession Nominal values Real values