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Unformatted text preview: What are wise choices? They are choices with benefits > costs as seen by the DECISION MAKER! (de gustibus non est disputandum tastes are beyond dispute) CHOICES: some are discrete (0-1 you do it or dont) in these cases you do it if B>C Most choices are continuous (do I buy another piece of pizza or not), in that you can do a little more or less of something. Typically, marginal benefits fall as more of any activity is done; marginal costs tend to rise As MB decrease, MC increase Find place when MB = MC ECONOMIC REASONING will involve incentives (not taste changes) To change behavior altered opp (income or prices) are what economists assume alters behavior In 1950s average woman had 3.3 children; in 2007 this is 1.9 (replacement = 2.1) why?...
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- Fall '07