Class Notes (1,100,000)
CA (650,000)
Ryerson (30,000)
ECN (1,000)
ECN 340 (200)

lower liberal

Course Code
ECN 340
Thomas Barbiero

This preview shows half of the first page. to view the full 3 pages of the document.
Thinking About Costs:
Choosing one alternative means giving up another alternative = costs (Opportunity cost)
Cost is a constraint on an action
No free anything – Everything has a cost
Money is just one means of measuring cost
Why do poor people ride buses and the rich fly?
oRich person’s time is more valuable
Why is the rich person’s time more valuable?
oBecause they can do more (defined by market)
Why do men/women forgo asking the other sex out on a date?
oFear of rejection (which is a cost)
Thinking About the Margin of Cost:
It is the additional costMarginal cost – That is important when we consider a course of
Economists don’t think in absolute terms; actions depend on extra costs and benefits
Costs rise as production of any good or service rises. But you also need incentives to
elicit more supply
Law of Demand:
Strongest possible predictive statement about human behaviour
oExample: Going to church (or any other religious institution)
(a) time; (b) contribution – If they increase, demand falls
oExample: Dating – What if women collude to increaseprice”? Will more or less
dating occur? (Will some women cheat and accept a “lower price”?)
oExample: Speeding and fines
You're Reading a Preview

Unlock to view full version