lecture2 - Economics 103 Lecture 2 Maximization The...

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Economics 103 Lecture # 2 Maximization The fundamental idea in economics has to do with motivation . - why do people do the things they do? This is what makes an argument economic … - all behavior is interpreted through this principle. - it doesn’t matter what your gender, race, religion, or neighborhood is. A Maximization Riddle: Can this explain why armies line up like this: Maximization NOT the same as Nonsatiation. Nonsatiation = more is preferred to less. - you can be made worse off by more of something. However, for convenience, we’ll assume more is preferred to less along with maximization.
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Maximization does not imply 1. People are always correct. 2. People are always cold and calculating. What troubles people about this principle is the economist insists it is … universal. It applies everywhere, always, and for everyone. What Does Maximization Imply? Scarcity. Recognize this guy? Why is Economics always in the news? - because we live in a world of scarcity. - scarcity implies there are always winners and losers to any choice.
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