{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

# 2nd class - Economics 101 Lecture 2 Some Business Head TA...

This preview shows pages 1–12. Sign up to view the full content.

Economics 101 Lecture 2

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Some Business Head TA - HIROAKI MIYAMOTO  Instant Aplia feedback Tangent line approximates a curve locally  about a point “ECON 101” in subject line Test on Feb 20 – first 3 chapters (the  core). Ask questions in-class. Slow to fast.
Opportunity Cost The opportunity cost of a engaging in an  activity is the value of everything you must  sacrifice to engage in it.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
You won a free ticket to an Eric Clapton concert. No resale. Bob Dylan is playing on the same night and is your most attractive alternative. Ticket to see Dylan is \$40 You would be willing to pay up to \$50 to see Dylan No other costs of seeing either performer What is the opportunity cost of seeing Clapton?
How doe we reason through  this? What do we give up by seeing Clapton?   -the opportunity to see Dylan for \$40 What is this opportunity worth (i.e., up to  how much would you bid for it on ebay?)   -Dylan is worth \$60, and the ticket costs  \$50, so the opportunity is worth \$10 = \$60  - \$50,      i.e., I receive \$10 in economic surplus  from the opportunity, so this is the  maximal amount I would bid.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Test Question Recall the Clapton ticket had NO resale value. Suppose now I could sell my Clapton ticket on the secondary market for \$50. Now what is my opportunity cost of seeing Clapton \$60 = \$10 + \$50
The Scarcity Principle    (Also called  the No-Free-Lunch Principle) Although we have boundless needs and  wants, the resources available to us are  limited.  So having more of one good  thing usually means having less of  another.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
8 Vilfredo Pareto “Once, during a speech he was making at a statistical congress in Bern, Pareto spoke of ‘natural economic laws,’ whereupon...
9 Gustav Schmoller Gustav Schmoller, who was present, said there was no such thing as ‘natural economic laws.’

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
10 Vilfredo Pareto Afterwards, Pareto asked Schmoller whether he knew of an inn where he could eat for nothing.
11 Gustav Schmoller The elegantly dressed Schmoller looked half

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 36

This preview shows document pages 1 - 12. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online