Marginal analysis, efficiency, equity, production possibilities frontier

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Department
Agriculture + Resrce Econ
Course
AREC 202
Professor
Christopher Goemans
Semester
Fall

Description
26 August Lambo vs Shelby What is the OC of driving the Lambo? Cannot drive the Shelby How much is the Shelby worth? $1,000,000 (benefit) $650,000 (cost) $350,000 (net benefit) Marginal analysis Evaluating on a unit by unit basis Marginal benefit – benefits of one more unit Marginal cost – cost of one more unit Efficiency Resources are allocated to their highest value use Markets can lead to efficiency Lots of fish → lots of reproduction → large harvest Few fish → little reproduction → small harvest Overfishing is inefficient Gains to Trade Two parties can engage in trade and both can be made better off Equilibrium – markets tend toward equilibrium Nobody can make changes to make themselves better off What is Equity? Fair trading Define fairness Equality?
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