Economics and Management
Principles of Microeconomics
Professor Dr. Greg Saltzman
Monopoly- only one seller in a particular market
Externality- some of the costs or benefits of a decision to produce or consume
something that spills over to third parties not involved in making the decision.
*Were not involved by the decision one party made, but as a third party,
you were affected*
Political demands for government to redistribute income or help the
disadvantaged
Rent Control- government regulates price of rental housing.
Opportunity Cost- Value of a resource in its best alternative use
Example: Value of a student’s time going to college
*Going to college justifies the opportunity cost of taking four years off from earning
money to pay the tuition and be in class*
Generally College Graduates make more than non-college graduates
Explicit Cost- paying for something monetarily
Implicit Cost- not necessarily just cash payment, but other included costs that do
not meet the eye
Market Demand- Interest in a good or service backed up by purchasing power
The customer not only has to want the good or service, but they have to be
able to buy it
Purchasing Power
oA cat in Michigan is eating the tuna that could be going to a human
being in Haiti
This is an example of how Purchasing Power is affected in a
free market system
Is it moral to put a price on human life?
Human Life is Infinitely precious
oWould you be willing to open up your checkbook and pay for another
person’s life?
Ex: Liver Transplant
Overpass in Albion over the Railroad Tracks
People walking in front of the train and getting hit vs.
other areas to spend money to save lives
