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Unformatted text preview: Principle of Voluntary Exchange A voluntary exchange between two people makes both people better off Principle of Diminishing Returns Suppose that output is produced with two or more inputs, and we increase one input while holding the other inputs fixed. Beyond some point called the point of diminishing marginal returns output will increase at a decreasing rate. The Real-Nominal Principle What matters to people is the real value of money or income its purchasing power not the face value of money or income...
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This note was uploaded on 11/11/2010 for the course ECN 211 taught by Professor Durant during the Fall '10 term at Mesa CC.
- Fall '10
- Opportunity Cost