EC2013S11_L2%281%29

EC2013S11_L2%281%29 - ECON2013 Principles of Macro Lecture...

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ECON2013 – Principles of Macro Lecture 2 Choices and Markets
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Today we talk about… 1. Choice and Opportunity Cost 2. Production Possibility Frontier 3. Market Allocation
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Economics or Biology? • Time Allocation Problem You have only 1 hour today to study either Economics or Biology. What should you do? In many choices you face a constraint. It can be limited time, limited money, limited resources… More Economics would mean less Biology
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Trade-off and Choice • Today you have to take a test both in Economics and Biology. You have 1 more hour to study and these are the grades you expect to get Allocation (E,B) Econ Bio 0,1 B A ½, ½ B+ B 1,0 A C The grade scale is: A=4 B+=3.5 B=3 C+=2.5 C=2
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Trade-off and Choice How do we make a sensible choice? What’s the relative cost of studying more Econ and less Bio? What is the most rational choice? Allocation (E,B) Econ Bio 0,1 B A ½, ½ B+ B 1,0 A C The grade scale is: A=4 B+=3.5 B=3 C=2.5 C=2
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A Chicken Farmer A chicken farmer has to choose between producing eggs or chicken meat. It has 5 chickens that can produce 10 eggs per week, but differ in size…
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Production Schedule Eggs Size in lb. 10 2.4 10 1.4 10 0.8 10 0.4 10 0.2
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Eggs Size in lb. Total
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This note was uploaded on 04/08/2011 for the course ECON 2003 taught by Professor Staff during the Spring '11 term at Arkansas.

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EC2013S11_L2%281%29 - ECON2013 Principles of Macro Lecture...

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