BUSI 2050U Lecture Notes - Marginal Cost, Opportunity Cost
Document Summary
Decisions must be made according to the limited supplies. Opportunity cost is to sacrifice for a risk (investment), the opportunity cost is the result of the sacrifice made in order to, hopefully, gain profit. Marginal costs are the input of the company or person to gain more profit the difference is the marginal cost it can either be a gain or a loss depending on the marginal decision. To plan, or decide whether to make a certain action to hopefully gain more profit is known as a marginal analysis. Weighing the pros and cons and makin the decision. Gains from trade: specializing is certain tasks then trading the outcomes. Equilibrium: a stalemate, in which no one can move from their positions in society. Any time the original equilibrium changes the economy will adjust accordingly. Eg: original equal-30 ppl in store and 3 checkouts 30/3=10ppl per checkout. Then 4th checkout opens then ppl split further.
