Ag Econ Chapter 3

Ag Econ Chapter 3 - Ag Econ Chapter 3 Scarce resources...

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Ag Econ Chapter 3 Scarce resources fossil fuels land usable water space medical care opportunity cost opportunity cost of college – working low opportunity cost – coal no such as truly free – there is always some sort of cost highways – congestion is a risk, taxes in Europe – there is a tax on every stage of production on the value of the product accrual accounting vs. cash accounting cash accounting – the only time cash changes hands is something recorded accrual accounting – inventory basis 1916 – federal income tax “back to renewable resources, we have destroyed billions of trees to print tax regulations” Market system – not centrally planned. we send signals to producers by where we spend our money and on what we spend it. they then will respond with raised or lowered production Opportunity costs – how much it will “cost” to change to another good. What makes sense to produce? Principle of increasing costs – the idea that when you start making more of something,
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Ag Econ Chapter 3 - Ag Econ Chapter 3 Scarce resources...

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