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ECON 103 (100)
Chapter 3

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Simon Fraser University
ECON 103
Iryna Dudnyk

Economics Reading Notes Chp.3 Substitution: Everyone is willing to trade some amount of one good for some amount of another good  Bribing kids with desert if they eat broccoli; they are trading a bad thing(broccoli) for a good thing(desert)  Everyone has their price  Act of the will (someone is willing to trade one good for another)  Does not state how much you are willing to give for how much of another good  Being able to pay for something just means you have the income for it, whereas being willing to pay means that you want to pay for something, or don’t want to pay for something( illegal drugs. Etc)  We trade off satisfaction now for a shorter life later (eating junk food, speeding) 3.1. Trade-Offs are Everywhere  If we want a new house, we have to drive an old Honda  New clothes, we have to give up eating Chinese food  Some laws prevent trade-offs, such as traffic fines  Everyone makes different trade offs 3.2. The Fallacy of Priority in Consumption  Different combinations of consumption can generate the same amount of satisfaction  To say that someone “needs” something is to say that it is a priority in consumption, and that an individual will not live if the need is not met 3.3. Marginal Value The maximum amount an individual is willing to sa
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