CAS EC 102 Lecture Notes - Lecture 7: Jean-Baptiste Say, Malcolm Gladwell, Marginal Utility

• School: Boston University
• Department: Economics
• Course: CAS EC 102
• Professor: Jay Zagorsky

Document Summary

Pm lecture #7: impact of risk and entrepreneurship on economic. A country"s standard of living depends on its ability to produce goods and services. Rich countries can produce more than poor countries. The higher the standard of living, the bigger the market for products. According to economist, jean baptiste say, what a country produced was based on the following: By leaving the economy along, the economic pie would naturally end up as large as possible. One method is to make a country"s citizens take more risk. Counter point: malcom gladwell does not believe that entrepreneurs are risk taking, instead, they are people who recognize great low risk opportunities that has a good pay off. Most people are risk adverse, because of diminishing marginal utility. Expected utility: value or satisfaction a person or firm places on each $ received. Expected value is determined by multiplying probabilities and adding up answers. Change over time: more people are starting businesses today.