CAS EC 101 Lecture Notes - Lecture 2: Social Capital, Human Capital, Capital Formation
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CAS EC 101 Full Course Notes
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Problem set assignment due @ discussion (posted on friday) Think about the goods, not the money. People respond to incentives sometimes in unexpected ways. Prices that reflect all opportunity costs provide the best incentives. Tolls general tax revenues can pay for maintenance, police, and construction, but tolls reduce highway congestion (less accidents, less people using the highways so less maintenance) Tolls are necessary for good highway management. Highway congestion has opportunity costs of travel time, happiness, excessive gasoline use. Tolls should cover the cost of congestion (high enough to cover the opportunity costs of congestion) Wealthier people, someone who is in a hurry to get to work. People not in a hurry, people who can"t afford it. Have to consider who is responding to surveys or participating in polls/studies. Read statistical findings and try to conclude if they are incorrectly stated. Sex makes students unhappy should be sex is associated with unhappiness among harvard students who see psychiatrists .
