ECO101H1 Lecture Notes - Lecture 3: Free Travel Pass, Bounded Rationality, Opportunity Cost

• School: UTSG
• Department: Economics
• Course: ECO101H1
• Professor: Pesando

Document Summary

Economic agents act very differently at different events according to the circumstances. Mc- the opportunity cost(unique to each student as different means of trave. If free travel pass(subway), then the mc= sh. Mc; rationality would dictate that the student travels to the uoft bookstore in. How, then do we evaluate the usefulness of economics, which assumes rational decision -makin. By the accuracy of predictions of economic analysis. They are used to illustrate the benefits of trade, between countries and between individuals. This is a direct representation of a linear ppf. Gumdrops to chocolates = 10/5 = 2 gumd. Chocolates to gumdrops = 5/10 = 0. 5 cho. An individual or country has comparative advantage for performing an activity if the opportu lower than anyone else. Comparative advantage is the key aspect to dictating the gains from trade, between 2 agents.