PLE 535 Lecture Notes - Lecture 2: Rational Agent, Shortage, Law Of Rent
13 Sep 2018
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Supply and demand of housing as a commodity. Basic principles of micro econ household decision making (realistic household decisions based on economics. ) Understanding how people respond ot different policies and incentivize actors: scarcity: necessitates choice. Economics monitors how people manage scarce resources: people face trade offs. Equity (equality of slices: the cost of something is what you give up to get it. Opportunity costs: rational people think at the margin. The marginal costs of goods (how much will the one extra thing cost: people respond to incentives. Municipal tax breaks for developers as long as they make the units affordable. The person is completely rational and has a consistent set of beliefs about the outcomes that will result from their decisions. Actors have preferences that place the relative desirability of all the outcomes. Decisions are designed to maximize satisfaction, ot maximize time, ability, and savings.
