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BU-204 Macro Economics – Week 2 Seminar

BU-204 Macro Economics – Week 2 Seminar. Welcome to. Overview. Welcome Review of Week 1 Material Questions Unit 2 Material Questions Preview of Unit 3 End. Review of Unit 1. Scarcity Opportunity Cost Trade-Offs Cost/Benefit Marginal Cost Analysis. Scarcity.

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BU-204 Macro Economics – Week 2 Seminar

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  1. BU-204 Macro Economics – Week 2 Seminar Welcome to

  2. Overview • Welcome • Review of Week 1 Material • Questions • Unit 2 Material • Questions • Preview of Unit 3 • End

  3. Review of Unit 1 • Scarcity • Opportunity Cost • Trade-Offs • Cost/Benefit • Marginal Cost Analysis

  4. Scarcity • Limited resources • Choices must be made • Opportunity Cost • The value of the next best alternative • Marginal analysis

  5. Opportunity Cost Retrieved from http://strom.clemenson.edu Retrieved from www.stus.com

  6. Opportunity Cost Example of cost of education • Annual salary - $50,000 (Implicit) • Tuition - $25,000 (Explicit) • 2 years of graduate school - $100,000 in salary and $50,000 in tuition • Total opportunity cost - $150,000 (Implicit & Explicit) • Future marginal income of working life should be higher

  7. Trade offs Cost vs. Benefits

  8. Marginal Cost Analysis • Efficiency in resource allocation • Analysis of benefits and costs of the marginal unit of good or input • Maximization of utility subject to a budget contraint

  9. Questions

  10. Overview • Welcome • Review of Week 1 Material • Questions • Unit 2 Material • Questions • Preview of Unit 3 • End

  11. Unit 2 Material • Economic Model • Production Possibilities Frontier • Comparative vs. Absolute Advantage • Circular Flow Diagram • Homework Assignment • Discussion Question

  12. Economic Model

  13. Unit 2 Material • Economic Model • Production Possibilities Frontier • Comparative vs. Absolute Advantage • Circular Flow Diagram • Homework Assignment • Discussion Question

  14. Unit 2 Material • Economic Model • Production Possibilities Frontier • Comparative vs. Absolute Advantage • Circular Flow Diagram • Homework Assignment • Discussion Question

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