CAS EC 101 Chapter Notes -Midpoint Method, Price Ceiling, Tax Wedge

• School: Boston University
• Department: Economics
• Course: CAS EC 101
• Professor: Michael Manove

Document Summary

Buyer and seller both want the transaction: voluntary exchange (market) Buyer does not want to buy at a price, but seller wants to sell: subsidy. Buyer wants to buy but the seller does not want to sell at that price: monopoly- break it up. 1-1b principle 2: the cost of something is what you give up to get it. 1-1c principle 3: rational people think at the margin. 1-2a principle 5: trade can make everyone better off. 1-2b principle 6: markets are usually a good way to organize economic activity. 1-2c principle 7: governments can sometimes improve market outcomes. 1-3 how the economy as a whole works 1-3a principle 8: a country"s standard of living depends on its ability to produce goods and services. 1-3b principle 9: prices rise when the government prints too much money. 1-3c principle 10: society faces a short-run trade-off between inflation and unemployment.