ECN 340 Lecture Notes - Lecture 11: Human Condition, Economic Planning, Root Mean Square
18 Apr 2016
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Document Summary
1. basic human condition of scarcity: human search for greater rewards. 3. lack of information, particularly in the market system. 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. Others, already in production will fail to retain the resources they do have. Choices and the necessity of allocation make failure unavoidable. But failures cause: a release of resources that can be re-employed (possibly at lower prices) in more successful undertakings, a decrease of abundant g & s produced that can then be sold at higher prices (when supply falls) As some businesses fail, others will start and grow. Even ef cient rms should fold if more ef cient rms exist. A beautiful female can fail to attract a particular male if an even more beautiful female competes. Information is costly both in the product ad resource (land, labour, and capital) market.
