ECO105Y1 Lecture Notes - Positive Statement, Comparative Advantage, Absolute Advantage
Document Summary
Quiz 1 (ch. 1-2) available next week, due saturday, 4 october 2014, 11:59pm graded. About what is; can be evaluated as true or false by checking the facts. About what you believe should be; involve value judgments. For any policy, always weigh benefits against opportunity costs. Economists usually focus on positive statements, trace and look at consequences. > taxation to achieve equity goal, but reduces efficiency: lower incentives to work. We don"t produce everything we want, but specialize in something and trade with other people. With voluntary trade, each person feels that what they get is of greater value than what they. Happen between individuals, businesses, countries etc. give up. You buying a coffee from tim"s: coffee is worth more than money to you, the money is better off to tim than the coffee. The ability to produce at a lower absolute costs than another producer. The ability to produce at a lower opportunity cost than another producer.
