Lecture2 - Four Useful Economic Concepts Commerce 394...

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Four Useful Economic Concepts Commerce 394: Government and Business Keith Head Sauder School of Business September 14, 2015
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Lecture 2: Learning Objectives After reading Brander Chapter 2 and attending this lecture, students should know how to Apply the 4 concepts, I opportunity cost, I marginalism, I incentives, and I efficiency to policy making. Identify which concepts are relevant when reading articles in the news. use the marginalist diagrams predict and analyze incentive issues associated with government policies.
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The case of Jericho Garrison The 39 Canadian Brigade Group is headquartered at the Jericho Garrison on West 4th Avenue. The following is a real posting from forums.army.ca: As I was passing by there the other day with my buddy...we started talking about how the garrison is sitting on some pretty prime real estate. Its right in a very posh area of vancouver down there. My question is (and forgive me if it seems stupid) is why the heck doesn’t the CF, which owns this massive chunk of primo real estate in vancouver, sell the land, make a kiiling, build a new base on cheaper land further out of the city and maybe make a decent profit...I know it would take a while to do something like that, but if the CF is strapped for cash like they always say they are, then why not look at creative ways of making some cash...the land they occupy in Jericho is worth a fortune...
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i > Clicker Quiz: Jericho Garrison Which economic concept is most relevant in the posting? A Opportunity Cost B Marginalism C Incentives D Efficiency
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Opportunity Cost Textbook Definition: the value of the best foregone alternative Another Definition: The opportunity cost of X is the amount of Y given up to get X, where Y is the best alternative to X.
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Opportunity versus “accounting” costs Units of measurement (opportunity costs might not be express in $) Opportunity costs EXCLUDE sunk costs. Opportunity costs INCLUDE costs for which there is no observed outlay. I Parent lets university-student continue to live at home. I Getting a (full-time) MBA. I Jericho Garrison.
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