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How are individual makes choices?
Fundamental principles behind the individual choices are as follows:
1. Resources are scarce.
2. The real cost of anything is what you should give up to get this
Opportunity cost
This is all about what you have to forgo to acquire your choice.
3. "How much", this is a decision at the margin.
Trade-offs
Marginal decisions and marginal analysis
4. People generally take advantage of opportunities to make them better off.
Incentives
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One constraint in our economy is time. As a society, we make choices about the allocation of time between work and other pursuits. In the US, most workers are eligible for overtime
Goods in the circular flow If Y R is total value of all goods going from F R to F H , then total value added from all firms in the F R box is equal to Y R (they don't pu
objective of the study
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Determine the present worth of a geometric gradient series with a cash flow of $50,000 in year 1 and increases of 6% each year through year 8. The interest rate is 10% per year.
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