ECON 1000 Chapter Notes - Chapter 5: Economic Surplus, Avoidance Speech, Externality
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ECON 1000 Full Course Notes
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Econ 1000 chapter 5 efficiency and equity notes. Aside notes on marginal cost and marginal benefit: Thinking on the margin is important in economics. Marginal benefit tends to decrease as you buy more. Marginal cost tends to increase the more you make. Marginal cost = marginal benefit is the best. Pizza example, should i buy another slice of pizza. I"(cid:373) (cid:373)issi(cid:374)g out o(cid:374) fla(cid:448)or, satisfa(cid:272)tio(cid:374), et(cid:272). if i do(cid:374)"t (cid:271)u(cid:455) a(cid:374)other o(cid:374)e. cost of pizza and getting up to get one is outweighed by benefit. Cost outweighs benefit, for example, it will cost money and is unhealthy. Does this exceed the cost of making it: maximize revenue by making sure marginal cost = marginal benefit. Marginal benefit: the maximum price willingly paid by a person. Value you get from one more unit of a good/service: demand curve is also a marginal benefit curve. Individual demand: the relationship between the price of a good and the quantity demanded by one person.