Econ Notes - 8/20/07 Circular Flow Scarcity

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8/20/07 Circular Flow Scarcity Gas price data will be collected each week for 14 weeks and is worth 5% of total grade. Households Goods Factor Markets Markets Firms The driver of the circular flow diagram is incentives. The reason for these incentives is Scarcity . The “no free lunch” concept. Assignment: Does scarcity really drive the economy? 8/22/07 Marginal Benefit=Marginal Cost MB=MC Model-Visual Representation. Predictive. Allows generalization for dynamic relationships among variables. The three concepts to understanding Microeconomics: 1. No history. You cannot change the past. 2. No free lunch. Every resource is scarce. 3. People like to be happy. Opportunity Cost ( I know what this means, but in this class )-The value of the second best Capital, Labor, Land Produced Goods $
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option. Circular flow model. 8/29/07 If there are differences in the slopes of their production curves, and/or in their opportunity costs, different parties can benefit by specializing. The opportunity cost of a gain in one thing is equal to:
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Econ Notes - 8/20/07 Circular Flow Scarcity

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