Lectures Notes

ECON1401 Lecture NotesLecture 2:

Incentives:- Notion of making decisions “on the margin” in response to incentive is a way of capturing the way humans

decide how to allocate their resources when facing constrained (resource-scarce or feasible-action-scarce) scenarios.

- A reason to do something. - Can arise from markets (price, product types), groups (business rules, taxes), loyalties (allegiance to a

country)- Economics: Often a material reason or a preference related reason that can be monetized.

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