EC 2-23-2011 - EC2232011 15:22

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EC 2-23-2011 15:22 Implicit:  costs that are foregone, still denominated in money Explicit:  costs that require the direct outlay of money Marginal Analysis:  comparing the costs and benefits for one more. Marginal Cost:  the cost for one more Marginal Benefit:  the benefit for one more Tend to decline, and can be calculated from willingness to pay Prinicipal of marginal analysis says that the optimal quantityis the the quantity at  which: Marginal benefit = marginal cost Marginal benefit remains higher/= to the marginal cost Marginal decision maximizes total gain. Skunk Costs Skunk costs should be ignored Incurred but unrecoverable costs Chapter 10 Rational Consumers When we get to the firm side, we assume firms maximize profits.
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This note was uploaded on 10/04/2011 for the course ECON 201 taught by Professor C.liedholm during the Spring '07 term at Michigan State University.

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EC 2-23-2011 - EC2232011 15:22

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