Marginal analysis, efficiency, equity, production possibilities frontier

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Agriculture + Resrce Econ
AREC 202
Christopher Goemans

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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