Class summary 10/3

Basic Economic Principles

Equity vs Efficiency

Axiom  Scarcity:

                             1. People face tradeoffs (TANSTAAFZ)

                             2. Oppotunity Cost (implicit) -  what you must give up to get it (Net Value of the next best option

COST: anything consumes resouces ( Application: Broken Window Fallacy)

In the text increase but the pie is decrease

For good thing you should trade for another good things,

Drag lag: in the world market who want them drag nape tine the population.

The drag hill let people loss work

The cost: no definition= any resources that consume.

We make choice what we must give up.
Net value of sure thing(not good definition)
The lemon----value of lemon and cost
Broken window: new job created we net chary
Not net change
Every simple choice.
Make choice on opportunity cost
Opportunity cost= Net value of the next best opportunity.
Calculate the net benefit when choice