Ss 1
Published on Nov 18, 2015
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MORE DECKS TO EXPLORE
PRESENTATION OUTLINE
Cost : Nothing is ever free, everything has a cost, no matter if its present, hidden or even an opportunity cost.
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An opportunity cost is the cost of your decision, for example, your late because you decided to over sleep.
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Decisions are an assumption of ration behavior.
People assume people will try to maximize benefits and minimize cost. For example, they will maximize happiness, well being, satisfaction, etc..
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In economics the two basic assumptions are tax, which means to penalize something, or subsidize, which means to reward something.
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For example, to tax something would mean if you were to cheat on an exam, and in return get a 0.
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An example of subsidize is if you were to own your own car, you would gain more by having no payments, and having transportation.
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Choice always involves changes in the status quo, and these choices result in marginal decisions, which would be a little more or a little less.
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Some examples of choice is the cost of one more plate while eating out, you would get more, and have to pay more.
Another example is your benefits from taking or not taking a class
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Information : You use information everyday in life, and no, it is not free, but knowing information helps you choice your decisions and determines the cost.
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So, as you see, no matter what there will always be a choice, and a cost, and you always have to be aware of short or long term effects.
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