ECN 340 Lecture Notes - Lecture 5: Tonic Water, Occupational Hazard, Root Beer
24 Feb 2017
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Document Summary
Chapter one: introducing the logic of life: the economics of sex, crime, and minnie mouse. Study conducted by researchers at john hopkins, increase in oral sex between ages of 12 and 24. Economists claim that: rational people respond to trade-offs and to incentives and disincentives. When they marginal costs or marginal benefits of a course of action change, people change their behaviour as they maximize satisfaction. Rational people think-not always consciously-about the future as well as the present as they try to anticipate likely consequences of their actions in an uncertain world. With this definition, the kids must be responding to incentives: the potential cost of oral sex must be lower than regular sex, thus they substitute as they would switch between drinks. Was happening at that time because of hiv. The assumption that people are rational leads us to some clear and testable theories about the way the world.
