Ec 202 Lecture Notes - Lecture 1: Invisible Hand, Marginal Cost, Comparative Advantage
Document Summary
Good institutions align self - interest with the social. Inflation is caused by increased in the cannot be avoided but can be moderated. Supply of money : incentives matter, people, fame , respond in predictable ways to incentives of all kinds reputation. , power, sex , & love are all incentives . Incentives : reward"s & penalties that motivates behavior. * keyt*qy : people are not motivated by your interest, but are motivated out of their own. B/c your prof needs to get paid. * kellaway : markets run better when everyone benefits : trade-offs are everywhere. Example : drug testing related to: trade - offs are, every choice involves something gained 6 something lost. to have 50 t . More of b . opportunity costs . give up. Opportunity cost : = the value of the choice lost . ie : i sold 8 apples to buy 10 bundles of wood, it cost me 8 apples to buy.
