eco review 1

Eco review 1 - are inversely related MB MC= MNB= how long should u keep something open Equilibrium= marginal net benefit= 0 and MB=MC Introduction

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The basic source of the economic problem is scarcity. The way people organize to cope with the economic problem is called an economic system. Resources: - Land- nature, timber, water, fish, minerals, original fertility of land - Labor- web page designeres ballet dancers professional football players, etc - Physical capital- irrigation ditches - Human capital- characterization of education and training of workers - Entrepreneurship- subdivision of labor Positive statement- what is Normative statement- what ought to be In the market environment, we labeled “competitive” we assume that producers are pricetakers and consumers are price setters Marriage premium is greater for men with wives who do not earn income than for men with wives who work 40 hours per week. Scarce goods have equilibrium prices greater than zero The law of demand says that the change in price and the resulting change in quantity
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Unformatted text preview: are inversely related. MB- MC= MNB= how long should u keep something open? Equilibrium= marginal net benefit= 0 and MB=MC Introduction of new technology for the production of capital goods would cause a movement from present place to highest on capital goods Surplus in market, price is above equilibrium Highest valued, next best alternative that must be sacrificed to obtain something or to satisfy a want is called opportunity cost. If consumers are frustrated, but producers are content, the current price must be below equilibrium Normal good- incersely related in price and demand Quantity exchanged???? Shortage- QD>QS at price below market cleaning price Surplus- QS> QD at a price above the market clearnign price QS>QD at p= 0, the good is nonscarce...
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This note was uploaded on 03/26/2008 for the course ECON 202 taught by Professor Brightwell during the Spring '08 term at Texas A&M.

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