ECON 22060 Study Guide - Fall 2018, Comprehensive Midterm Notes - The Net 1995 Film, Payday 1972 Film, Opportunity Cost
12 Oct 2018
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Agents always face scarcity . (when resources are not available to satisfy the wants) Agents are rational . (people will act in a way that is optimal, to achieve their goals-> according to incentives [the best choice] More availability to those with more money. Scarcity, every decision comes with a tradeoff (benefits/costs) Discrete (all or nothing) (yes or no) ex: job offer. Continuous (a degree to which you can do something) *almost all problems will fall under continuous* Marginal benefit (the benefit of adding one more unit) Marginal cost (the cost of adding one more unit) Opportunity cost: the wage you could have gotten if you didn"t go to college. The net value of the next best alternative (cost-benefits) Specialization (whatever you are better at doing you do that task) Absolute advantage (whoever is better at a task should do it) Comparative advantage (the one who gives up the least should do that task) (whoever has the lowest opportunity cost)
