Lecture Slides 2 - Quick reminder Any students who need...

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Quick reminder Any students who need special accommodation based on the impact of a disability is encouraged to contact KOKUA program at University of Hawaii at [email protected] For more information, please visit the website at: http :// faculty.htm / 11/30/16 1 Econ 130_ Fall 2016_Lecture 2_ C Dhakal
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Last Class Syllabus Introduction to Economics What is Economy? Why Study Economics? How to think Like an Economists? 11/30/16 2 Econ 130_ Fall 2016_Lecture 2_ C Dhakal
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How to think Like an Economists? There are 12 importance and basic principles of Economics: The Principles of Individual choice/ decision The Principles of Interaction of Individual choices The Princ iples of Economy-wide interaction Individual (4 principles) Society (5 principles) The economy (3 principles) 11/30/16 3 Econ 130_ Fall 2016_Lecture 2_ C Dhakal
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The Principles of Individual choice/ decision 1) People must make choice because resources are scarce (People face tradeoff) Resources are scarce, we cannot have everything that we want. Trade-off: one thing is given up in order to get another. E.g study economics or Chemistry ; join college or work Should Government spend on National defense (guns) against consumer goods (Butter). Making decision requires trading off one goal against another. Scarcity forces us to make choice ( what to produce, whom to produce and where to produce) 11/30/16 4 Econ 130_ Fall 2016_Lecture 2_ C Dhakal
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2) The true cost of something is its opportunity Cost Making decision requires comparing cost and benefits of alternative courses of action. Economist call this kind of cost as opportunity cost. Definition : Opportunity cost is the cost in terms of the forgone opportunity to pursue the best possible alternative activity with the same time or resources ( Dolan, P. 6). I’e Value of next best alternative. 11/30/16 5 Econ 130_ Fall 2016_Lecture 2_ C Dhakal
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Opportunity cost examples The tuition you pay to get your degree is part of your opportunity cost of a college education, because you could, otherwise, spend the same money on something else.
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