ECO 2013, CHANGES IN SUPPLY &COLLECTIVE DECISION MAKING
ECO 2013, CHANGES IN SUPPLY &COLLECTIVE DECISION MAKING ECO2013
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This 2 page Class Notes was uploaded by Valerie Aranya on Tuesday February 2, 2016. The Class Notes belongs to ECO2013 at Florida State University taught by Joab Corey in Winter 2016. Since its upload, it has received 45 views. For similar materials see macroeconomics in Economcs at Florida State University.
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Date Created: 02/02/16
Changes in Supply Price moves in opposite direction from supply Quantity moves in same direction Supply UP price DOWN quantity UP When we produce more, it becomes less rare, therefore decreases its price) Invisible Hand Principle Pencil making process thousands of people from all around the world come and cooperate together to get this pencil to you as cheaply as possible but they don’t care about you. People who only care about themselves will do a better job in doing what is the best interest for other people (ex: you do a great job as waiter not because you care about the customers but because you care about the tips) It is accomplished through prices Chapter 6 – Economics of collective decision making Role for the government what role should the government have in our society primary role: protect individuals and their property rights other role: provide goods that overcome the market value Market vs. (market failure) Government (government failure) size of the government % of GDP (government spending) where is the government spending most of the $$$? Federal spending: 1. Medicare & health ($857.51 billion = 23.8%) 2. Social security 3. National defense State and local spending: 1. Education 2. Public welfare & health 3. Administrative expenses Transfer Payments The government takes $$ from one group of people and gives it to another group of people. (giving money to police not transfer, service money) Ex: welfare (taking money from higher income, giving it to lower) Transfer payments compromise nearly half of the total government spending. 2
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