Macroecon week 2 notes
Macroecon week 2 notes EC 202
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This 1 page Class Notes was uploaded by Melina Canzano on Sunday September 13, 2015. The Class Notes belongs to EC 202 at Michigan State University taught by Z. Macomber in Summer 2015. Since its upload, it has received 456 views. For similar materials see Introduction to Macroeconomics in Economcs at Michigan State University.
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Date Created: 09/13/15
Macroeconomics Week 2 Notes 99015 Professor Macomber RESOURCES 3 Categories 1 Landeverything naturally occurring on the earth 2 Laborhuman energy time and effort 3 Capitaltoolsmachinery used to produce things Production used all 3 categories to some extent 0 Budget Constraint gt 2 variables inform the choices available 1 Price of goods 2 Current incomemoney available 3 important economic implications arise from the budget constraint 1 Opportunity costwhat you have to give up to get what you desire 2 Marginal analysiscomparing the benefits and costs a little more or a little less gt Law of Diminishing Returns marginal utility at some point the amount of utility brought by a new unit of the good we are consuming is LESS than the previous unit 3 Sunk Cost a cost that has incurred in the past and cannot be recovered AKA money already spent This should not affect current decisions