ECON 2001.03H Lecture Notes - Lecture 3: Homo Economicus

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Opp. cost = implicit cost + explicit cost. Can be in terms of $ but also in terms of time, effort, happiness, etc. Explicit costs (accounting costs): are out-of-pocket costs (in terms of $) for a firm or an individual. In economic model, rational" individuals engage in activities if mb>mc. We will never (at least we try to) do something where mb

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