Ch.1def - Efficiency vs Equity Argument – Explains the...

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Remember Tutoring – Tuesday 430-6 PM and Wed. 7-830 PM in Eisenhower 211. Other definitions in addition to the one’s already discussed. Here are two very important economic concepts I could not find in your book that you will be examined over. Sunk Cost – A cost that cannot be recovered in the future so it should not affect decisions. (I bought tickets to the game Saturday and cannot resell them, that is a sunk cost) A positive statement is a statement of economic facts as opposed to a normative statement which is a statement of opinion More definitions from Chapter One Markets – Collections of buyers and sellers, defined by geographical location or willingness and ability to buy/sell. Ceteris Paribus – All other things equal. (An increase in the price of peanut butter will decrease the demand for jelly ceteris paribus)
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Unformatted text preview: Efficiency vs. Equity Argument – Explains the idea that as a society produces more resources at a lower cost that the distribution of resources may not be equitable or “fair”. Obviously this depends on your definition of “fair”. Other important general economics topics What does it mean to think at the margin? What are MARGINAL COSTS AND MARGNINAL BENEFITS? You should understand the difference between nominal and real prices. What is the proper role of government? The importance of productivity – What leads to long term growth? Ch. 2 -Production Possibility Frontier – Shows what a society could produce if they are using all resources efficiently and there is no unemployment. We can find op. cost by looking at the slope of the PPF....
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This note was uploaded on 12/21/2011 for the course ZOL 320 taught by Professor Kopachik during the Fall '11 term at UCSB.

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