Lecture 12
1
Page
128
Views
The Economic Value of Failure
Failure arises because of:
1. Basic human condition of scarcity
2. Human search for greater rewards
•Trying sets up failure (i.e. Saying “I am going to be richer than Bill Gates”)
3. Because of market system
Failures of Scarcity:
•Choices have to be made, some of which will not work out
•Some producers will not be able to get the necessary resources they need
o
o
•Others already in production will fail to retain the resources they have
oEmployees leave
oInvestors pull out money invested
•Choices
•Pervasiveness of scarcity ensures failure
•But failure causes
1.A release of resources that can be re-employed (possibly at lower prices) in more
successful undertaking
2. A decrease in abundant G & S produced that can be sold at higher prices (when
supply falls)
Searching for Greater Rewards:
•Even efficient firms should fold if more efficient firms exist
•In market economy; No such thing as good ABSOLUTE performance
•Relative performance matters
•A beautiful female can fail to attract
www.notesolution.com
Loved by over 2.2 million students
Over 90% improved by at least one letter grade.
OneClass has been such a huge help in my studies at UofT especially since I am a transfer student. OneClass is the study buddy I never had before and definitely gives me the extra push to get from a B to an A!
Leah — University of Toronto
Balancing social life With academics can be difficult, that is why I'm so glad that OneClass is out there where I can find the top notes for all of my classes. Now I can be the all-star student I want to be.
Saarim — University of Michigan
As a college student living on a college budget, I love how easy it is to earn gift cards just by submitting my notes.
Jenna — University of Wisconsin
OneClass has allowed me to catch up with my most difficult course! #lifesaver
Anne — University of California
Description
Related notes for ECN 340
