BU204_03_Johnson_Jennifer_Unit 1 Homework

To me marginal analysis means that if the additional

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To me “Marginal Analysis” means that if the additional benefit exceeds the additional cost, then I should do it. Market Equilibrium:
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“when no individual would be better off doing something different.” (Krugman & Wells, 2009, p. 13). To me this means that the demand and the supply exactly equal to each other. This means that the cost of the product or service is will remain the same as there is enough for everyone who is demanding it. Government interventions: “That is, when markets go wrong, an appropriately designed government policy can sometimes move society closer to an efficient outcome by changing how society’s resources are used.” (Krugman & Wells, 2009, p. 15). To me “Government interventions” is when the government steps in and makes changes that affect economic activity and resource allocation. Unintended Consequences : “that the end result of individual choices may be quite different from what any one individual intends.” (Krugman & Wells, 2009, p. 11). To me “unintended consequences” means that what happened is not what you thought would happen. The unintended outcomes may be positive or negative but in the end you did not think they would end that way.
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Reference Krugman, P. and Wells, R. (2009) Macroeconomics, Second Edition . New York, Worth Publishers
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