ECN 340 Chapter Notes - Chapter 2: Peanut Butter, Marginal Cost, Holding Hands

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3 Oct 2012

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People do things less well because of the added (marginal) cost. Writing a c paper is less costly than writing an a paper more effort needed. Values of professor and students are different. Young"s benefits larger gains for longer period of time. Grass may be a short cut, thus can bring benefits. Marginal cost is close to zero if the path already there. Most people think that if they alone walk on the grass, the mc will be close to zero. Pollution may be rational if other"s behaviour cannot be controlled escalation can occur. Everyone wants to be heard, looking out for own interests. Costs to helping out, assume others will help. No one in a position to take charge and co-ordinate. Cost and benefits of driving includes probability of getting into an accident. Airbags reduce probability of death reduce cost of careless driving. Cost of reckless driving born by others.

Related Questions

Do an internet search on public funding of stadiums/sports facilities (i.e., the use of taxpayer monies to pay for the construction of stadiums/sports facilities for professional teams) Pay particular attention to research presented by mainstream business news organizations such as: MSNBC and CNBC, as well as any economic think tanks such as the American Enterprise Institute, Brookings Institution, Cato Institute, or the Center for Economic and Policy Research. Links to several economic think tanks can be found at Economics Think Tanks.

Conduct an objective marginal analysis as covered by the text; objectively weigh marginal benefits and marginal costs of the use of taxpayer monies to pay for the construction of stadiums/sports facilities for professional teams. Determine whether or not the if the marginal benefits outweigh the marginal costs.

Please format your response as per below:

1. Identified marginal benefits.

2. Identified marginal costs â what opportunity costs are generated by the decision?

3. Do the marginal benefits outweigh the costs? Why or why not?

Note that this is a societal level marginal analysis so your costs and benefits must be societal level. Also, marginal costs are the opportunity costs which you need to identify.

Some university students think that because a university degree greatly increases their earning potential there is no opportunity cost of attending university. How would an economist look at the matter? a. There is no opportunity cost, assuming that future earnings actually increase as expected. b. The opportunity cost is much less than it would appear, assuming that earnings increase. c. Opportunity cost is a meaningless concept in this situation. d. The university students are completely correct in all respects. e. There is still an opportunity cost, even if it is justified by higher future earnings.

12) "There can be too much of a good thing." This statement suggests that A) choices made in self-interest cannot be applied to many economic decisions. B) a good may be produced to the point where its marginal benefit is equal to its marginal cost. C) a good may be produced to the point where its marginal benefit exceeds its marginal cost. D) a good may be produced to the point where its marginal cost exceeds its marginal benefit. E) certain goods and services such as education and health care are inherently desirable and should be produced regardless of costs and benefits.

ECN 340 Chapter Notes - Chapter 2: Peanut Butter, Marginal Cost, Holding Hands

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