ECO333H1 Lecture Notes - Lecture 2: Maple Syrup, Utility, Marginal Cost
Document Summary
Lecture 2 why cities exist and factory model. Ghost towns (we need to care about people) When a city struggles we will be mistaken in thinking increasing infrastructure will solve the problem. Economies of scale: average cost is falling as quantity goes up. Indivisible inputs (no such thing as of a shovel) Returns to scale: constant: double input -> double output. Increasing: double input -> more than double the output. If prices are constant, constant returns implies no economies of scale and increasing returns implies economies of scale. Marginal product: how much more output you get for each additional unit of input. Differences in people (some people are better at things than others) We get bigger and fewer cities: this goes against the argument posed by telecommuting for work (could live anywhere, but city population not decreasing) In ontario, 0. 8% of land has 86% of the people.
