EC120 Chapter Notes - Chapter 1: Marginal Utility, Marginal Cost, Free Lunch
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EC120 Full Course Notes
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Office hours: wednesday: 1:30-2:30 pm, email: lmcleoad@wlu. ca (cid:523))nclude (cid:498)ec(cid:883)(cid:884)(cid:882)(cid:499) in subject line(cid:524, textbook: principles of microeconomics, 6th canadian edition (2014), by. How people make decisions: vocabulary, graphical analysis, relies heavily on math (more so in upper years) (cid:498)there"s no such thing as a free lunch(cid:499) milton friedman. All decision involve tradeoffs: labour/leisure tradeoff: working longer hours (results in more money) leaves less time for leisure (spending money), study/party tradeoff: going to a party the night before your midterm leaves less time for studying. Society faces tradeoff: efficiency vs. equity: efficiency: when society gets the most from its scarce resources, equity: when prosperity is distributed more (cid:498)fairly(cid:499) among society"s. Rational people: systematically and the purposefully do the best they can to achieve their objectives, given their constraints, make decisions by evaluating costs and benefits of marginal changes, marginal change: small incremental adjustments. Rational decision makers take action (if and only if) if marginal benefits exceed marginal costs.
