Econ - Resources= factors of production-land labor capital entrepreneurship time 5 powers of economic thought 1 resources cost more than you

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Resources= factors of production -land, labor, capital, entrepreneurship, time 5 powers of economic thought 1. resources cost more than you think -accounting cost- $ cost - forgone opportunity cost- the next highest valued alternative 2. all decisions are rational: ones behavior is consistent with what one wants 3. all decisions are made at the margin -margin- the weighing of the additional costs and additional benefits of a specific change in the current situation (marginal cost and benefit) 4. the answer is always it depends 5. people are maximizers Post hoc fallacy: false cause and effect relationship “A occurs before B; therefore, A is the cause of B”….example: superstitions are post hoc fallacy Fallacy of composition: what is true of the part is true of the whole Adam smith- specialization Absolute advantage: one entity can do something faster/greater than another Comparative advantage: one entity can produce something at a lower marginal opportunity production cost than another entity
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This note was uploaded on 04/02/2008 for the course ECON 200 taught by Professor Cramer during the Spring '07 term at University of Arizona- Tucson.

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Econ - Resources= factors of production-land labor capital entrepreneurship time 5 powers of economic thought 1 resources cost more than you

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