1.) Every economic decision made involves some sort of trade-off; nothing is free. For something to be free, when you produce and consume something you cannot use up any resources at all. Costs are anything that consume resources and so they are directly related to trade-offs. Taxes are NOT costs because they don't consume resources; they're just an exchange.
2.) Opportunity costs..... net value of next best opportunity. Opportunity costs are essentially the basis for everything in this course. Bruce Springstein tickets vs. Barry Manilow tickets. What is the opportunity cost if Barry Manilow tics are $40 but your willingness to pay is $50 and the Springstein tics were free? Opportunity cost = $10 because it's the net value of the next best opportunity.
3.) Broken Window fallacy
- no new jobs created
- $ spent on new roof is not $ spent on other things
- NO NET CHANGE
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