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Unformatted text preview: different way of spending the money—increased funding at higher education institutions, cancer research… o What is your opportunity cost of attending Ec 11 lectures? Taking a nap, watching TV, doing physics homework… o What is the opportunity cost of getting a puppy? The cost of getting a puppy not only includes the price you pay for the puppy but also includes the vet, food costs and the time you spend on the puppy. Instead, you could spend your time and money on buying new games, leveling up your characters… Complements & substitutes o What happens to the demand for 1% milk when the price of 2% milk increases? The demand for 1% milk is likely to increase since 1% milk and 2% milk are substitutes. What happens to the demand for hides consumers when the price of beef decreases because become more worried about cholesterol? The price of beef has gone down because beef is less demanded. Thus producers will want to raise fewer cattle. Thus the price of hides will go up. And the quantity demanded will go down. o What happens to the demand for hides when the...
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This note was uploaded on 11/07/2013 for the course ECON 11 taught by Professor Rosenthal during the Spring '10 term at Caltech.
- Spring '10