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

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
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
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

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...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online