ECO101H1 Lecture Notes - Marginalism, Opportunity Cost
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ECO101H1 Full Course Notes
Verified Note
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Document Summary
Economics: study of how rational people make choices. Logical thinking in economic context: apparently non-economic problems are economic problems. The opportunity cost of an action is what one forgoes (give up) by not taking the best alternative action. Insights: (1)the question: should i do x? should be replaced by should i do x or y where y is the most highly valued alternative action . The opportunity cost of attending a concert (1)if the best alternative is working part-time, at . 00/hr. . 00 (2)if the next best alternative is riding your bicycle. Riding bicycle: more than 60. 00 (since you prefer riding your bicycle to working part-time. more than . 00) The opportunity cost of spending is (since you could spend on other goods/services) After graduating from high school, jack finds a job /yr ; jill finds a job /yr. Who is more likely to go to university, if the next best alternative is to work.
