ECO100Y1 Lecture Notes - Demand Curve, Marginal Cost, Prussian P 8
Document Summary
I do things a little differently than mankiw. Makes things a little more complicated now . makes things a little easier later. Recall key concept ii: thinking at the margin. Decisions are often about more or less . Thinking at the margin consideration of the bene ts/costs of doing marginally more (e. g. , one more) or marginally less (e. g. , one less) of an activity. Keep doing an action as long as marginal bene t at least as large as marginal cost. If i stopped doing an action, it must be because marginal cost outweighed marginal bene t of additional units . 1 tie-breaking rule if the bene t of doing something is exactly equal to its cost, do it. Each seller"s good is exactly the same as any other seller"s. Each buyer is small relative to the entire market. Any 1 buyer can buy as much as he wants at the market price without affecting the market price.
