ECP-4613 Lecture Notes - Lecture 2: Avoidance Speech, Negative Cost, Marginal Cost
Document Summary
Axiom: state or prop that"s regarded as being established, accepted, or self-evidently true; there"s a general consensus that an axiom is true; not a lot of uncertainty about it: prices adjust to achieve locational equilibrium: Housing rent gradient: a gradient is an equation/diagram that relates a variable to distance from a given point. Labor market: teacher offered job at wayne state but a compensating differential had to be paid to him bc it"s a bad place to live; real differences reflect col and nominal wages. Real wage = nominal wage/cost of living: self-reinforcing effects generate extreme outcomes: Change in one direction causes even larger change in the same direction. Ex) car dealerships: 25 different dealerships on tennessee st bc people like to comparatively shop when it comes to cars; get more customers when they locate themselves near other dealerships; they are a type of agglom econ.
