Econ note chapter 1 - incmparable units In Canada the...

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The Cost Benefit Principle The cost- Benefit Principle : An individual (or a firm or a society )should take an action if and only if the extra benefits from taking the action are at least as great as the extra costs Measuring the costs and benefits can be very difficult and very often involve informal considerations Applying the Cost/Benefit Principle: Benefits and Costs “Money isn everything” But to make rational choices we must compare costs and benefits Are the benefits greater or less tan the costs? To compare the benefits of a decision to the costs, benefits and costs must be measured
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Unformatted text preview: incmparable units In Canada, the Canadian Dollar is most often used as the unit for measuring economic values People Are Rational Economists assume that people are Rational: that they know their goals and try to fulfill these goals as best they can with the mimited resources they have Typically, people use the Cost-Benefit Principle to resolve the economic trade-offs they face If there is no scarcity-i.e. no trade offs, then there is no ecnomoinc problem...
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This note was uploaded on 09/23/2010 for the course ECONOMICS ES50054 taught by Professor Johncullis during the Spring '09 term at University of Bath.

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