ECO 201 Lecture Notes - Lecture 2: Capital Good, Marginal Utility, Marginal Cost

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30 Dec 2017

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Democratic place a greater emphasis on equity and government intervention in the market. Equity vs. efficiency is essentially the rich vs. the poor. Economic growth is expansion in an economy"s ability to produce goods and services. Capital goods and services vs. consumer goods and services. +consumer goods and services = food, clothes, etc. Income inequality per capita is huge across the world. One big reason for this is because places like africa don"t have people with capital to increases their earned income and skills and training. Economists assume individuals compare costs and benefits in decision making. Opportunity costs are the highest valued alternative given up gaining something in the activity chosen. Economists assumed that people make decisions on the margin . Evaluate the consequence of making incremental changes in the use of their resources. Marginal benefit (mb) the benefit from pursuing an incremental increases in an activity. Marginal cost (mc): opportunity cost of pursuing an incremental increases in an activity.