ECON-2110 Lecture Notes - Lecture 1: Opportunity Cost, Sunk Costs, Miles Copeland Iii
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No: markets tell everyone to do this, more questions: how does sony decide how many hgtv"s to make. Incentives rewards and penalties that motivate behavior: ex: in 1787, the british government hired sea captions, to transport prisoners to australia. Their pay was determined by the number of prisoners transported. So they changed it so captions were paid for every prisoner that survived. Final result: improved health of prisoners, 99% survival rate. b. Is sleep or studying more important: hard to answer, bad question. **note: economists usually assume people are rational, that is, they make decisions by comparing marginal benefit to marginal cost i. Tradeoff: regulatory process that stops unsafe drugs from reaching the market, but it delays safe drugs which could save lives. Positive analysis: a positive statement addresses the consequences of an action, ex: if the price of chips falls people eat more potato chips, ex: increasing day care quality the price will go up.