Lecture Notes 1-26-10 - Notes: 1-26-10 Asch T. Hawthorn...

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Notes: 1-26-10 Economics T-Th A. Ordonez Asch T. Hawthorn 809-195-3K1C 1/26/10 Ten principles broken down into 3 categories- How people make decisions (principles 1-4) How people interact (principles 5-7 How the economy as whole works (principles 8-10) Principle 1: people face trade-offs "There is no such thing as a free lunch" In order to get one thing, we usually have to give up another thing 4 Classic examples: o Food vs. Clothing o Leisure time vs. Work time o Guns vs. Butter (military vs. public goods) o Efficiency vs. Equality Efficiency: means that society gets the most that it can from limited resources. Equality: means that the benefits of those resources are distributed fairly among the members of society. Principle 2: The cost of something is what you give up to get it. Opportunity cost of an item is what you give up to obtain that item. Principle 3: Rationale people think at the margin. Rationale People
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This note was uploaded on 05/10/2010 for the course ECONOMICS 809-195-3K taught by Professor A.ordonez during the Spring '10 term at Gateway Tech.

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Lecture Notes 1-26-10 - Notes: 1-26-10 Asch T. Hawthorn...

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