New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

Week2 Notes

by: Abigail Johnson

Week2 Notes ECN 222 - 005

Abigail Johnson
GPA 3.59

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

Jan 20th
Adam Talbot Jones
Class Notes
Macroeconomics, Economics
25 ?




Popular in Macroeconomics

Popular in Economcs

This 5 page Class Notes was uploaded by Abigail Johnson on Tuesday January 5, 2016. The Class Notes belongs to ECN 222 - 005 at University of North Carolina - Wilmington taught by Adam Talbot Jones in Spring 2016. Since its upload, it has received 152 views. For similar materials see Macroeconomics in Economcs at University of North Carolina - Wilmington.


Reviews for Week2 Notes


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 01/05/16
1/22/16 4:02 PM WEDNESDAY JAN 20 th Assignment due next Wednesday (available 01/21): Advancing, not retreating • Read two articles and answer Q’s Last class we began principles of economics. 1. People face tradeoffs i. Major tradeoff: efficiency vs. equality 2. The cost is what you give up to get instead. Opportunity Cost. 3. Rational people think at the margin. i. Rational People: Do the best they can for themselves. 1. They systematically and purposefully do the best they can to achieve their objectives (assumes self-interest) ii. Making decisions by evaluating cost and benefits of marginal changes: incremental adjustments to an existing plan. Small changes to future-based ideals or plans. 1. Increase in output: compare the costs of labor and materials needed to the end-result, or output iii. Sunk Cost: What happened in the past that is regretted 1. EX: bought an engagement ring, proposed, she said no. Sunk Cost. iv. Examples: 1. Is it worth the extra effort, loss of dignity, etc. to gain a penny? 2. Is another year at college worth it? a. Cost-Benefit: fees, foregone wages, tuition, debt vs. salary 3. NBA player: school and debt and classes vs. millions of dollars for a professional sport contract v. Marginal Utility: Newspaper stands cost 75cents and the machine fully opens and you can take as many as you want. Soda machine costs $1 and gives you 1 soda. Marginal utility of the newspaper is very low after the first one, whereas all sodas maintain high utility for longer periods of time. vi. Applying the principle: 1. Buy a nice 1996 car of your choice, spend $1,000 on repairs. Transmission dies. Costs $600 to repair the transmission. In either scenario, should you repair the transmission. Why. a. Valued at $6,500 if it works, or else $5,700 if it doesn’t. i. YES: spending $600, gains you an extra $200 in value b. Valued at $6,000 if it works, or else $5,500 if it doesn’t. i. NO: lose $100 in value with repair Explanation: Option Benefit Cost Net 6500- a 5700 600 200 6000- b 5500 600 -100 4. People respond to incentives i. Incentive: induces a person to act. (stimulus in environment) Looking for a reward or avoid a consequence 1. Increase in gas price: buy more hybrids, sell trucks, use less gas 2. Policy: a. Taxes- increase cigarette taxes, teen smoking decreases, overall smoking rates decrease b. Retirement savings averages $100,000 i. Incentives to save more = tax breaks through IRA and other programs ii. Could re-vamp tax code, tax what they earn, don’t tax what they “long-term” save. CURRENT tax code rewards spending and taxes saving 3. Greed is Good speech from movie “Wall Street” with Michael Douglas a. Greed works, especially in free market at equilibrium b. Management has no stake in the company (own less than 3% of company) c. Share holders own 97% of company and can manipulate company in aligned self-interests 4. Seatbelt laws: accidents increased and deaths decreases significantly. Same concept with airbags. Scarcity à Tradeoffs à Opportunity Cost à Rational/Self-Interest à Incentives The Principles of How People Interact • Example in Class: o 10 volunteers, each given a food item (candy mostly). o Rate 1-10 how much they wanted their treat (least to best) o Trading began amongst 10 volunteers o “International trading” à trading with professor o Re-rate their items 1-10: most increased their ratings o Principle: Trading makes everyone better off! 1/22/16 4:02 PM 1/22/16 4:02 PM


Buy Material

Are you sure you want to buy this material for

25 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Jim McGreen Ohio University

"Knowing I can count on the Elite Notetaker in my class allows me to focus on what the professor is saying instead of just scribbling notes the whole time and falling behind."

Allison Fischer University of Alabama

"I signed up to be an Elite Notetaker with 2 of my sorority sisters this semester. We just posted our notes weekly and were each making over $600 per month. I LOVE StudySoup!"

Steve Martinelli UC Los Angeles

"There's no way I would have passed my Organic Chemistry class this semester without the notes and study guides I got from StudySoup."


"Their 'Elite Notetakers' are making over $1,200/month in sales by creating high quality content that helps their classmates in a time of need."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.