LECTURE 1

LECTURE 1 - increase safety 2 nd Economist - people drive...

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1. Note on method 2. demand and supply first law of demand demand shifters demand verses “quantity demanded” tips to getting correct answers use economics use the most fundamental rules of economics answers based on assumptions are not as strong as answers based on fact actions show truths better than statements refutable hypothesis make a hypothesis that could be wrong then go find out if they are right or wrong DEMAND AND SUPPLY market demand: the relation between the price of a particular good and the quantity of the good consumers are willing to buy at that price, during a certain time other things equal 1 st law of demand – other things equal quantity demanded is negatively related topics At lower prices people are willing to buy more Examples 1. 9-10 Peltzman, seatbelts there is a demand for risky driving – if risky driving becomes safer (ie. The cost of risky driving is decreased) then more risks will be taken. 2 affects – 1 st Engineering - seat belts
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Unformatted text preview: increase safety 2 nd Economist - people drive faster. 2. A. In some communities the government was worried about trash consumption. There is a lot of trash. So they charge per bag of trash. If charged per bag there will be fewer bags but the bag size will increase. B. smoking is bad. Therefore when taxed smokers inhale more deeply. Then companys make the cigarettes more potent. 3. In the 70s the price of gas almost tripled but it was thought that if it did go up people would still drive as much. This is not true. 4. You cant teach an old dogs new tricks. For a younger person to learn something new the time/ cost is a lot less than for a person in older age 5. shipping the good apples out Washington State apples tasted better out of state than the did in state. The good apples in Washington sell for 20 cents and average apple sells for 10 cents. When shipped out you loose less than when. ....
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This note was uploaded on 05/16/2008 for the course EC 201 taught by Professor Xasdf during the Fall '08 term at N.C. State.

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LECTURE 1 - increase safety 2 nd Economist - people drive...

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