economics - Econ day 3 Aplia course key 959f-axvf-mvwh 1)...

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Econ day 3 Aplia course key 959f-axvf-mvwh 1) Opportunity cost a) Making decisions all the time---how people and societies make best decisions i) In order to make best decisions… compare ALL relevant benefits and ALL relevant costs ii) Opportunity cost—what you give up (some measured easily, some measured not so easily) iii) Opp cost of coal based electricity plant…. = wage of workers + cost of coal +other materials (water for cooling, etc…) + cost of facility +cost of maintaining facility… THESE ARE EXPLICIT COSTS— (1) Explicit costs are costs here power plant pay cash or checks to someone— show up on a balance sheet (2) If you only include explicit costs, you are making a mistake, you must also include other costs (a) Additional costs = implicit costs (not easy to measure, but just because of this doesn’t mean theyre not important) (i) Like… air pollution of power plant that contributes to global warming, hurricanes, melting ice caps, emphysima, dead fish, etc. b) Production possibilities frontier-graph of combination of outputs that cam be produced if we use this as efficiently as possibliy c) SEE INDESIGN 1 2) How do we increase productive capacity of the economy? (1) Technological improvements (a) Example of improved processes for existing goods (b) New goods (2) Capital investments (a) Machinery (b) Factory buildings (c) Computers (d) Railroad cars (e) Delivery vans
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economics - Econ day 3 Aplia course key 959f-axvf-mvwh 1)...

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