ECO-2000 Study Guide - Midterm Guide: Marginal Utility, Terrassa, Marginal Cost
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#1: incentives matter: choice is influenced in a predictable way by changing incentives. Picking up the penny, dollar, five (money game) If you feel safer when wearing a seatbelt your drive more recklessly. If candy bars are cheaper you"ll buy more and vice versa: the economic principle influences all people. Students will do more work on assignments worth more points. Politicians: do the most to maximize votes. Altruists (missionaries, mother tarrasa): if costs were too high to build an orphanage in ny they move it to a cheaper place. Criminals: if a house has a adt security sign they prop wont rob you: individual are rational: getting most from limited resources. What"s the least amount of work i can do to get an a. Note: what is rational for one may not be rational for others. If you don"t like getting hit with paintball you wont play.