ECON 201 Lecture Notes - Lecture 3: Pricegrabber, Opportunity Cost, Potential Output
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Tuesday, august 30, 2016 chapter 2: some tools of the economist. * this chapter focuses on ve topics: opportunity cost, trade, property rights, the potential output level of an economy, and the creation of wealth. * because of scarcity, we can"t have everything we want. As a result, we constantly face choices that involve trade-offs between our competing desires. The opportunity cost of spend 5 hours study math is that you give up 5 hours to either watching tv, or study. Why you choose to study math 5 hours instead. Because you think this is the highest valued alternative. * monetary costs re ect opportunities foregone, and they can be measured objectively in terms of dollars and cents. However, sometimes, the monetary cost is a poor measure of the total cost. Because it can"t measure the opportunity cost of your time, effort, and other resources.