2010: LECTURE 2 2ELEVEN BIG IDEAS FOR BEYOND THE FINAL0.Things are scarce.1. People face trade-offs.To get something, have to give up (trade-off)something.Go swimming, have to give up (trade-off) climbing...
2010: LECTURE 2 32.Cost of something is what you have to give up - opportunity cost.Cost of CU education.If out-of-state student and alternative is own-state univ.CU tuition$ 80 000less own-state univ.20 000opportunity cost60 000If in-state student and alternative is working:CU tuition$ 20 000plus earnings given up80 000opportunity cost100 0003.Most decisions can be broken down into marginal decisions.Not decide between “never eat out” or “always eat out”, but “do I want toeat out one more time?”
This preview has intentionally blurred sections.
Sign up to view the full version.