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Unformatted text preview: • GCE- how govt wants For whom? • Market- whoever values it most assuming they can afford it • GCE- who govt wants-Positive Theories Explains how things actually do work • Objective • Testable Ex. Roses are more expensive during feb 13 th- 14 th-Normative Theories Opinion Subjective Not testable Ex. “poor people are stupid”-Marginal Analysis We assume people are rational in attempt to maximize happiness • Assume people make decisions at the Margin Marginal Analysis- consider the incremental consequences of a bit more of some activity • Consider benefits vs. const of a decision • Marginal benefits: extra benefits of extra activities and marginal costs= extra costs and benefits o Opportunity costs -Production Possibility Curve What is it? • Production possibility curve (frontier)...
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This note was uploaded on 04/02/2008 for the course ECON 101 taught by Professor Miller during the Spring '08 term at Arizona.
- Spring '08