MAE101 Lecture Notes - Lecture 1: Externality, Market Power, Marginal Cost
1 Aug 2018
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Document Summary
Economics = the study of how society manages its scarce resources. Lesson 1: people face trade offs e. g. spend more on country defence = less for standard of living clean environment = less income for industries. Another trade off we face is efficiency vs equity. Often when governments create policies these two goals conflict. Efficiency = the property of society getting the most it can from scarce resources. Equity = the property of distributing economic prosperity fairly among members of society. This means the slice of pie is smaller, but more fair. Lesson 2: the cost of something is what you give up to get it e. g. going to uni = education and job oppurtunities but costs money in fees, books etc. This total is not a true and total reflection of what it costs to go to uni. Hidden costs such as rent, food and most importantly your time are often overlooked.
