Week 1 Notes
Week 1 Notes
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This 2 page Class Notes was uploaded by Lori Holte on Saturday October 15, 2016. The Class Notes belongs to at Virginia Polytechnic Institute and State University taught by in Fall 2016. Since its upload, it has received 3 views.
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Date Created: 10/15/16
AAEC unit 1 notes 8/22/16 Economics= study of choice, or value Diamond Water Paradox- water essential for life, but diamonds not, why cost more? o Diamonds rare scarcity, diamonds are expensive to produce Lessons: o Cost ǂ price o Value lies at the margin o DMU: diminishing marginal utility 2 diamond (anniversary, etc) has a lower price Dessert cheaper than cost of producing it 8/24/16 Opportunity costs= forgone net benefits from NOT doing the next best thing/choice (3 , rd 4 , etc are irrelevant). Examples: o Cost for college (~$25,000) + opportunity costs (stay home to work ~ $20,000) total opportunity cost ~ $45,000 o Idk what he said o U.S. navy boat crashed into a barge barge sank (navy’s fault) barge wanted $$ for replacement – value of lost commodities of barge (not brand new) o Sara choose between two potential love interests 3choices. Opportunity cost= either man OR staying single Sunk costs are irrelevant to decision-making (time/resources spent on second choice prior to decision) PPC production possibilities curve (see notes): concave because of increasing opportunity costs Growth= more of everything Next page Scarcity – D Inefficiency – A Choice – B or C Opportunity costs – B or C 8/26/16 Appreciation: increase in value over time
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