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Unformatted text preview: usually means having less of another. z Because of scarcity we must make choices. Chapter 1: Thinking Like an Economist Slide 5 Choice In a World of Scarcity The Cost-Benefit Principle z An individual (or a firm or a society) should take an action if, and only if, the extra benefits from taking the action are at least as great as the extra costs. Chapter 1: Thinking Like an Economist Slide 6 Choice In a World of Scarcity Choosing the Optimal Class Size z Assume that the cost of a class with 20 students is $1,000 per student more than a class of 100 students z Should the class size be reduced to 20 students? z Why are honors classes smaller?...
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This note was uploaded on 02/20/2012 for the course ECON 202 taught by Professor Brightwell during the Spring '08 term at Texas A&M.
- Spring '08