Econ 110 week 1 notes
Econ 110 week 1 notes Econ 110
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This 1 page Class Notes was uploaded by Sydney Clark on Monday September 5, 2016. The Class Notes belongs to Econ 110 at Brigham Young University taught by Kearl in Winter 2016. Since its upload, it has received 79 views.
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Date Created: 09/05/16
Econ 110 Week 1 Notes Economics o Discipline that focuses on social structure o Tools that create a specific outcome o Analysis of incentives o Rules influence the outcome NOT the motives Motives Social Structure Outcomes Self interest Rules $2.15 Explicit for implicit $1.00 Constraints are scarcity o To change outcome, you have to change social structure or incentives o Social Structure leads to Incentives Difference between incentives and motives o Incentive receives a reward for certain behavior If you change incentives, people change behaviors Different people make different decisions depending on incentives o Motive is reason choice is made Dominant motive is self-interest Scarcity Ex: Positive prices are scarce Scarcity o If we want more than what is available and possibilities are limited. o Leads to competition o 1.) choose how we make time for work and play o 2.) choose the mix of what we consume and how o 3.) choose between consumption now and in the future Opportunity cost o Value to you of the best forgone alternative Cost and competition Individuals want to minimize cost through competition of prices Competition o Lifeboat metaphor Scarcity of sufficient lifeboats Some people are better off at the expense of others Always a winner and a loser o Intersection metaphor Space in center of intersection is scarce 2 cars competing force space=accident All are worse off o Invisible hand Not enough to go around More is always defined as less Because we compete everyone is better off
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