Expectations, Grading, Utility, Marginal Analysis, Models, PPC

1. Listen and follow directions. 2. Treat everyone in the class with respect. 3. No hurtful comments. 4. Do your best to complete every assignment. If you are not able to, ask the teacher for help.

 Mr. Hinsvark  Everyone

 Classwork/Homework  10%  Mixture of completion and accuracy  Quizzes  30%  Open Note  May or may not be announced  Based on readings and class notes  Tests  60%  Closed Note  Announced at least two days in advance  Based mainly on class notes, but will include questions from reading

 Utility  An economic term referring to the total satisfaction received from consuming a good or service.  A consumer's utility is hard to measure. However, we can determine it indirectly with consumer behavior theories, which assume that consumers will strive to maximize their utility.  Utility is a concept that was introduced by Daniel Bernoulli. He believed that for the usual person, utility increased with wealth but at a decreasing rate.

 Marginal changes involved the addition or subtraction of one good or service  Marginal decisions; what to do with the next ton of pollution, the next hour of free time, the next dollar earned.  Marginal Benefit-The benefit of doing something on more time (measured in utils or dollars)  Marginal Cost-The cost of doing something one more time

 If the marginal benefit exceeds the marginal cost the activity should continue  Ex: If I am purchasing donuts and the benefit is higher than the cost I should continue purchasing donuts  If the marginal benefit is less than marginal cost then do not continue

 Activity 1.1, 1.3, and 1.7 “Favorite Ways”  Complete Activity 1.1 together  Complete Activities 1.3 and 1.7 in groups

 Simplified representation used to better understand a real life situation  Economist version of a wind tunnel  Ceretis Paribus (Set-uh-ris Pear-uh-bus)  All things equal assumption  All other relevant factors remain unchanged. Only the variable you are studying changes.

 Illustrates the tradeoffs facing an economy that produces only two goods.  Shows the maximum quantity of one good that can be produced for each possible quantity of the other good produced.