ECO105Y1 Chapter Notes - Chapter 3: Marginal Cost, Marginal Utility, Opportunity Cost

96 views4 pages
School
Department
Course
Professor

Document Summary

Chapter 3: show me the money (the law of supply) Supply like demand, starts with decision makers choosing among alternative opportunities by comparing expected benefits and costs at the margin. (with the example in the textbook) your willingness to work depends on the price offered and on the opportunity costs of alternative use of your time. Marginal cost: additional opportunity cost of increasing quantity supplied, and changes with circumstances. Marginal cost would have it that the higher quantity supplied, higher prices are necessary to compensate for the higher opportunity costs of more additional time (or other resources) given up. Every buying or selling choice is a fork in the road. Selling- there are alternative uses of your time. Opportunity cost of any choice is value of best alternative you give up. Supply and demand choices reverse the composition of benefits and costs. Supply- marginal benefit is measured in dollars (wage you earn); marginal cost is opportunity cost of time.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related textbook solutions

Related Documents

Related Questions