Lec2 - willingness and the ability to pay b ALLOCATION i...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Lecture 2: Blackboard.eller.arizona.edu ID: net ID Password: ID # (23054299) Most important tab: review questions: extremely helpful on the exams Three basic economic questions: 1. What to produce? a. Dollar vote of the consumer (consumer sovereignty) b. Capitalism: consumer demand c. Communism: government (U.S.A is a mix economy) 2. How to produce? How do we decide on the best way to produce a good or service? Optimization a. Maximize profit b. MEASURING PRODUCTIVITY i. Value of Output/ Value of input, Ratio larger: it is called global competition, producing a better product- and doing so at a lower cost. 3. For whom? How do we allocate the goods and service once they have been produced? a. In the capitalist system it is based on the person’s
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: willingness and the ability to pay. b. ALLOCATION: i. Tradition this is the way it has always been. India-many primitive economies. ii. Command-Central authority makes the allocation decisions.-Communist iii. Market system – consumer votes with dollars – more votes more of the good is produced. iv. Personal characteristics: you are the economic czar of a store Merchandise? 1. Age? 2. Occupation? 3. Sex? 4. Strength? 5. Political party? 6. Good luck? 7. First in line 8. Hair color? v. Those who want the good will acquire it, the mechanism. But we automatically discriminate against a certain group (leaving somebody out for some reason)....
View Full Document

This note was uploaded on 10/02/2011 for the course ECON 200 taught by Professor Cramer during the Spring '07 term at Arizona.

Page1 / 2

Lec2 - willingness and the ability to pay b ALLOCATION i...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online