B200.F08.W03-04.PowerPoint

B200.F08.W03-04.PowerPoint - Buad 200 Week 3-4 The Economic...

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Buad 200 Week 3-4 The Economic System of Competition Gains from Specialization & Trade
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Review: Definitions Good Good : is anything that an individual wants to have more of, at zero price. Resource : Anything that can be used to produce goods. Scarcity : A good is scarce if the amount desired at zero price is more than the amount available at zero price. (Scarce good = Economic Good)
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Review:Assumptions Review:Assumptions Humankind has unlimited wants Our resources are limited Scarcity Scarcity : Individually, and as a Society, we do not have enough resources to produce all the things we want.
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Review:Implications of Scarcity Review:Implications of Scarcity Choice Choice : people must choose which goods to acquire. Economic Cost Economic Cost : The Cost of any action, is the personal value of the next highest valued alternative given-up.
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Costs: Economic vs. Accounting Accounting Cost : The explicit expenditure for a given activity. Economic Cost Economic Cost : The Cost of any action, is the personal value of the next highest valued alternative given-up. Sunk Cost : Past expenditures that no longer represent an alternative (Not a part of Economic Cost)
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Review:Implications of Scarcity Review:Implications of Scarcity Choice Choice : people must choose which goods to acquire. Economic Cost
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B200.F08.W03-04.PowerPoint - Buad 200 Week 3-4 The Economic...

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