ECON 102 Lecture Notes - Lecture 1: Empiricism, Human Behavior, Opportunity Cost

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Chapter 1 the principles and practice of economic. Economists use to test theories and to determine what is causing thing to happen in the real world. Evidenced-based economics: example is facebook free, there is no such thing as free facebook, economics relates to everything. Important to recognize that if we increase spending money on crime prevention, we must decrease spending on something else = tradeoffs: tradeoff is necessary because we as individuals and as a society, face constraints. If you drive 3 miles, you can buy it for . I(cid:374) (cid:272)o(cid:374)te(cid:454)t of opportu(cid:374)it(cid:455) (cid:272)ost: if (cid:455)ou did(cid:374)"t (cid:373)ake the dri(cid:448)e, how much would it cost you of you were in the market for the book? () If the benefits are greater than the costs for driving to but the book, then that mist also be the case with driving to save on the computer. Equilibrium: a situation in which no one benefits by changing his/her behavior.

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