ECON 101 Lecture Notes - Lecture 1: Demand Curve, Comparative Advantage, Human Capital
14 Oct 2016
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Individual choice - decisions by an individual about what to do and what not to do. Resource - anything that can be used to produce something else. Scarce - when there"s not enough of the resource available to satisfy all the ways a society wants to use it. Weighing the incremental benefits vs the incremental costs. Means additional, incremental, change or (delta) Types of choices: one thing, all or nothing - do it or not, quantity - how much of it to do, multiple things: Mutually exclusive - can only do one at a time. Not mutually exclusive - can do all and evaluate each as one thing (multitasking) Look at expected or estimated mb"s and mc"s of doing it. Profit, revenues, safety, healthy, satisfaction, output, cost savings, time savings. Marginal costs = opposite of above ^ (not good, less of everything, what is costs you) Choose a if (mba - mca) > (mbb - mcb)
