Demand Side: Community Indifference Curve (CIC) Shows various combinations of two goods with equivalent welfare
|
|
|
- Hugh Martin
- 6 years ago
- Views:
Transcription
1
2 Basic Tools for General Equilibrium Analysis Demand Side: Community Indifference Curve (CIC) Shows various combinations of two goods with equivalent welfare Good Y Downward sloping And Convexity CI Since Y(MU y ) = - X(MU x ) -Y/X = MU x /MU y Diminishing marginal rate of substitution Y X Y MRS = - = X MU x MU y CI 0 Good X
3 Consumer demand is always satisfied with more goods Good Y Ordinal and Transitivity: Farther out from origin point Means higher welfare to consumer CI 0 CI 1 CI 2 CI 3 Good X
4 Non-intersecting Community Indifference Curve Good Y CI 0 : B = A = C CI 1 : A = D A = B = C = D B CI 1 > CI 0 D > C contradiction A D C CI 0 CI 1 Good X
5 Good Y These are the wrong ortions of CIC. Why? C 0 Good X
6 Consumer equilibrium: Maximize welfare subject to the income constraint (Budget constraint) Good Y y I 2 I 1 Slope of budget line: Y/X = (0y)/(-0x) = (I 1 / y )/(-I 1 ) x ) = - x / y = MRS y 1 A CI 0 At point A: ( x )(0x 1 ) + ( y )(0y 1 ) = I 1 y 1 = (I 1 )/( y ) ( x / y )X 1 Y = (I 1 )/( y ) ( x / y )X Y/X = x / y 0 x 1 x Good X
7 Supply side: roduction possibility frontier (F) Isoquent concept: Show various combinations of two inputs that produce same level output Capital Downward sloping and Convexity for possible substitution Marginal rate of technical substitution K 1 K 1 K L (K)x(M K ) = - (L)x(M L ) K/L = - M L /M K K/L = MRTS Q 1 0 L 1 L 1 Labor
8 Capital Non-intersecting Farther out from origin point Means greater quantities of outputs K 1 K 1 K L Q 1 Q 2 Q 3 Q 4 0 L 1 L 1 Labor
9 Constant return to scale: a given percentage increase in all inputs will lead the same percentage increase in output Capital Capital intensive output expansion path 4K 1 G Labor intensive output expansion path 2K 1 G K 1 Q 2 =20 0 L 1 2L 1 4L 1 Q 1 =10 Labor
10 roducer Equilibrium:At the point the isoquant is tangent to the isocost. Firm maximizes output for the given cost (i.e., most efficient production), Or firm minimizes its factor cost for the given level of output. Capital K K K 1 B 2 B 1 H The slope of isocost (or the factor price line) K/L = 0K/-0L = - (B 1 /r)/(b 1 /w) = w/r where r is labor wage, w is capital rental rate = M L /M K = MRTS Q Q 2 1 At point : B 1 = rk + wl rk = B 1 wl K = (B 1 /r) (w/r)l K/L = - w/r 0 L 1 L L Labor
11 Increasing K Ks K S-Isoquant (K/L)s S is capital-intensive (K/L)s > (K/L)c or (L/K)s < (L/K)c C is labor-intensive (L/K)s < (L/K)c or (K/L)s > (K/L)c Kc (K/L)c C-Isoquant Oc Ls Lc L
12 Resources allocation in two goods within a country Increasing K K Ls Os Kc (K/L)c Ks Oc (K/L)s Lc L Isoquant
13 K L The Edgeworth Box: Not areto Efficiency C4 C5 0s C2 C3 V C1 0c S5 S4 S3 S2 Contract curve: production efficiency locus with increasing opportunity cost S1 L K
14 K L The Edgeworth Box: C5 0s C4 C2 C3 C1 V Not areto Efficiency 0c S5 S4 S3 S2 S1 Contract curve: production efficiency locus with constant opportunity cost L K
15 Country II: Capital abundant country Steel S 0 S 1 K 2 C 3 S 2 C 2 S 3 C 1 C 0 Clothes L 2
16 Country I: Labor-abundant country S 0 Steel S 1 C 3 K I C 2 S 3 S 2 C 1 C 0 Clothes L I
17 Constant vs. Increasing Opportunity Cost on the F Good Y F (or contract curve) with constant opportunity cost Increasing Opportunity Cost F (or contract curve) Decreasing increase 0 Constant increase Good X
18 General equilibrium: domestic demand = domestic supply Good Y ( x / y ) roduction at point A 0 is satisfied and consumed by consumers demand within a country with constant opportunity cost. (Classical case) A 0 CI 1 CI 2 CI 0 F & budget curve Good X
19 Y-Steel A E CI 2 CI 1 B CI 0 X (autarky price) Y F 0 Marginal rate of transformation (MRT) MRT XY MC MC X Y X Y MU MU X Y MRS XY X -Cloth Marginal rate Of substitution (MRS)
20 General equilibrium: domestic demand = domestic supply Good Y ( x / y ) roduction at point A 0 is satisfied and consumed by consumers demand within a country with increasing opportunity cost. (Neo-classical case) A 0 CI 1 CI 2 CI 0 F Budget curve Good X
21 Y-Steel A E Community Indifferent curves CI 2 CI 1 B CI 0 X 0 Marginal rate of transformation (MRT) MRT XY MC MC F X Y X Y Y (autarky price) MU MU X -Cloth X Y MRS XY Marginal rate Of substitution (MRS)
22 Good Y Country A Given labor endowment is fixed with L L L a x x + L x + a y y y L A a y X Solving for Y Y a L - y a x a y x 0 Good X L A a X the slope is - a x a y = - x y
23 Unit cost in producing X is a x or (w x a x ) Total cost in producing X is a x x w wage in money term Then MC X X (a x x) a x In perfect competition: X MC X > x a x Similarly: y MC y y a y Thus: x y a a x y labor units required to produce1unit of labor units required to produce1unit of X Y
24 Trade Triangle Concept From the export country view of point: T = 1 = terms of trade or relative price imports 10 units exports 10 units imports 5 units T =1/2 =Terms of trade becomes worse exports 10 units
25 Trade Triangle Concept imports 15 units T = 3/2 = Terms of trade better off for export country exports 10 units
GENERAL EQUILIBRIUM. Wanna Download D. Salvatore, International Economics for free? Gr8, visit now jblogger2016.wordpress.com
Wanna Download D. Salvatore, International Economics for free? Gr8, visit now jblogger2016.wordpress.com PDF Version of Lecture Notes by jblogger2016 GENERAL EQUILIBRIUM FIRM AND HOUSEHOLD DECISIONS Input
Lecture 8: Producer Behavior
Lecture 8: Producer Behavior October 23, 2018 Overview Course Administration Basics of Production Production in the Short Run Production in the Long Run The Firm s Problem: Cost Minimization Returns to
Topic 3: The Standard Theory of Trade. Increasing opportunity costs. Community indifference curves.
Topic 3: The Standard Theory of Trade. Outline: 1. Main ideas. Increasing opportunity costs. Community indifference curves. 2. Marginal rates of transformation and of substitution. 3. Equilibrium under
NAME: INTERMEDIATE MICROECONOMIC THEORY FALL 2006 ECONOMICS 300/012 Midterm II November 9, 2006
NAME: INTERMEDIATE MICROECONOMIC THEORY FALL 2006 ECONOMICS 300/012 Section I: Multiple Choice (4 points each) Identify the choice that best completes the statement or answers the question. 1. The marginal
Faculty: Sunil Kumar
Objective of the Session To know about utility To know about indifference curve To know about consumer s surplus Choice and Utility Theory There is difference between preference and choice The consumers
3 General Equilibrium in a Competitive Market
Exchange Economy. Principles of Microeconomics, Fall Chia-Hui Chen October, Lecture Efficiency in Exchange, Equity and Efficiency, and Efficiency in Production Outline. Chap : Exchange Economy. Chap :
Review of Production Theory: Chapter 2 1
Review of Production Theory: Chapter 2 1 Why? Trade is a residual (EX x = Q x -C x; IM y= C y- Q y) Understand the determinants of what goods and services a country produces efficiently and which inefficiently.
Chapter 6. Production. Introduction. Production Decisions of a Firm. Production Decisions of a Firm
Chapter 6 Production Introduction Our study of consumer behavior was broken down into 3 steps Describing consumer preferences Consumers face budget constraints Consumers choose to maximize utility Production
Consumer Choice and Demand
Consumer Choice and Demand 1 Utility Utility Analysis Sense of pleasure, or satisfaction that comes from consumption Subjective Assumption Taste are given Tastes are relatively stable 2 Total utility Utility
Measuring Cost: Which Costs Matter? (pp )
Measuring Cost: Which Costs Matter? (pp. 213-9) Some costs vary with output, while some remain the same no matter the amount of output Total cost can be divided into: 1. Fixed Cost (FC) Does not vary with
Chapter 11: General Competitive Equilibrium
Chapter 11: General Competitive Equilibrium Economies of Scope Constant Returns to Scope Diseconomies of Scope Production Possibilities Frontier Opportunity Cost Condition Marginal Product Condition Comparative
EC Intermediate Microeconomic Theory
EC 311 - Intermediate Microeconomic Theory Lecture: Cost of Production Cont. Bekah Selby rebekahs@uoregon.edu May 5, 2014 Selby EC 311 - Lectures May 5, 2014 1 / 23 Review A firm faces several types of
INTERMEDIATE MICROECONOMICS LECTURE 9 THE COSTS OF PRODUCTION
9-1 INTERMEDIATE MICROECONOMICS LECTURE 9 THE COSTS OF PRODUCTION The opportunity cost of an asset (or, more generally, of a choice) is the highest valued opportunity that must be passed up to allow current
Chapter 7. The Cost of Production. ΔVC Δq. ΔTC Δq. Fixed and Variable Costs. Fixed Cost Versus Sunk Cost. Measuring Costs
Chapter 7 The Cost of Production Fixed and Variable Costs Total output is a function of variable inputs and fixed inputs. Therefore, the total cost of production equals the fixed cost (the cost of the
Managerial Economics & Business Strategy Chapter 5. The Production Process and Costs
Managerial Economics & Business Strategy Chapter 5 The Production Process and Costs I. Production Analysis Overview Total Product, Marginal Product, Average Product Isoquants Isocosts Cost Minimization
PRODUCTION COSTS. Econ 311 Microeconomics 1 Lecture Material Prepared by Dr. Emmanuel Codjoe
PRODUCTION COSTS In this section we introduce production costs into the analysis of the firm. So far, our emphasis has been on the production process without any consideration of costs. However, production
Lecture 28.April 2008 Microeconomics Esther Kalkbrenner:
Lecture 28.April 2008 Microeconomics Esther Kalkbrenner: Supply and Demand Familiar Concepts Supply and Demand (Chapter 2) Applying the Supply and Demand Model (Chapter 3) Consumers Choice Consumer Choice
Short-Run Cost Measures
Chapter 7 Costs Short-Run Cost Measures Fixed cost (F) - a production expense that does not vary with output. Variable cost (VC) - a production expense that changes with the quantity of output produced.
Math: Deriving supply and demand curves
Chapter 0 Math: Deriving supply and demand curves At a basic level, individual supply and demand curves come from individual optimization: if at price p an individual or firm is willing to buy or sell
Major Themes in International Economics + Review of Microeconomic Concepts
Major Themes in International Economics + Review of Microeconomic Concepts Major themes in International Economics Review of microeconomic concepts» Demand, Supply» Demand + Supply = Equilibrium» Utility
Chapter 5 The Production Process and Costs
Managerial Economics & Business Strategy Chapter 5 The Production Process and Costs McGraw-Hill/Irwin Copyright 2010 by the McGraw-Hill Companies, Inc. All rights reserved. I. Production Analysis Overview
c U 2 U 1 Econ 310 Practice Questions: Chaps. 4, 7-8 Figure 4.1 Other goods
Econ 310 Practice Questions: Chaps. 4, 7-8 Figure 4.1 Other goods A H a c U 2 b U 1 0 x Z H Z 1. Figure 4.1 shows the effect of a decrease in the price of good x. The substitution effect is indicated by
Managerial Economics & Business Strategy Chapter 5. The Production Process and Costs
Managerial Economics & Business Strategy Chapter 5 The Production Process and Costs I. Production Analysis Overview Total Product, Marginal Product, Average Product Isoquants Isocosts Cost Minimization
Chapter 7. The Cost of Production. Fixed and Variable Costs. Fixed Cost Versus Sunk Cost
Chapter 7 The Cost of Production Fixed and Variable Costs Total output is a function of variable inputs and fixed inputs. Therefore, the total cost of production equals the fixed cost (the cost of the
AS/ECON AF Answers to Assignment 1 October Q1. Find the equation of the production possibility curve in the following 2 good, 2 input
AS/ECON 4070 3.0AF Answers to Assignment 1 October 008 economy. Q1. Find the equation of the production possibility curve in the following good, input Food and clothing are both produced using labour and
Chapter 5. Resources and Trade: The Heckscher- Ohlin Model
Chapter 5 Resources and Trade: The Heckscher- Ohlin Model Introduction So far we learned that: Free trade leads to higher average real income per capita But not everyone within the country is better off
EC306 Labour Economics. Chapter 5" Labour Demand
EC306 Labour Economics Chapter 5" Labour Demand 1 Objectives Labour demand in the short run - model, graph, perfectly competitive market Labour demand in the long run - model, graph, scale and substitution
Lecture 2: The neo-classical model of international trade
Lecture 2: The neo-classical model of international trade Agnès Bénassy-Quéré (agnes.benassy@cepii.fr) Isabelle Méjean (isabelle.mejean@polytechnique.edu) www.isabellemejean.com Eco 572, International
Chapter Seven. Costs
Chapter Seven Costs Topics Measuring Costs. Short-Run Costs. Long-Run Costs. Lower Costs in the Long Run. Cost of Producing Multiple Goods. 2009 Pearson Addison-Wesley. All rights reserved. 7-2 Economic
File: Ch03; Chapter 3: The Standard Theory of International Trade
File: Ch03; Chapter 3: The Standard Theory of International Trade Multiple Choice 1. A production frontier that is concave from the origin indicates that the nation incurs increasing opportunity costs
Chapter 7. Costs. An economist is a person who, when invited to give a talk at a banquet, tells the audience there s no such thing as a free lunch.
Chapter 7 Costs An economist is a person who, when invited to give a talk at a banquet, tells the audience there s no such thing as a free lunch. Chapter 7 Outline 7.1 Measuring Costs 7.2 Short-Run Costs
Production Theory. Lesson 7. Ryan Safner 1. Hood College. ECON Microeconomic Analysis Fall 2016
Production Theory Lesson 7 Ryan Safner 1 1 Department of Economics Hood College ECON 306 - Microeconomic Analysis Fall 2016 Ryan Safner (Hood College) ECON 306 - Lesson 7 Fall 2016 1 / 64 Lesson Plan 1
Elements of Economic Analysis II Lecture II: Production Function and Profit Maximization
Elements of Economic Analysis II Lecture II: Production Function and Profit Maximization Kai Hao Yang 09/26/2017 1 Production Function Just as consumer theory uses utility function a function that assign
Lecture 12 International Trade. Noah Williams
Lecture 12 International Trade Noah Williams University of Wisconsin - Madison Economics 702 Spring 2018 International Trade Two important reasons for international trade: Static ( microeconomic ) Different
Chapter 4 Topics. Behavior of the representative consumer Behavior of the representative firm Pearson Education, Inc.
Chapter 4 Topics Behavior of the representative consumer Behavior of the representative firm 1-1 Representative Consumer Consumer s preferences over consumption and leisure as represented by indifference
ECON 100A Practice Midterm II
ECON 100A Practice Midterm II PART I 10 T/F Mark whether the following statements are true or false. No explanation needed. 1. In a competitive market, each firm faces a perfectly inelastic demand for
Chapter 4. Consumer and Firm Behavior: The Work- Leisure Decision and Profit Maximization. Copyright 2014 Pearson Education, Inc.
Chapter 4 Consumer and Firm Behavior: The Work- Leisure Decision and Profit Maximization Copyright Chapter 4 Topics Behavior of the representative consumer Behavior of the representative firm 1-2 Representative
ECON 381 LABOUR ECONOMICS. Dr. Jane Friesen
ECON 381 LABOUR ECONOMICS Dr. Jane Friesen Work disincentive effects ofa welfare program Y W 1 T Y 1 Y min U 1 U 2 L 1 L min T L Welfare Reform Basic welfare programs create big disincentives to work This
Public Affairs 856 Trade, Competition, and Governance in a Global Economy Lecture 6-7 2/12-2/14/2018
Public Affairs 856 Trade, Competition, and Governance in a Global Economy Lecture 6-7 2/12-2/14/2018 Instructor: Prof. Menzie Chinn UW Madison Spring 2018 Outline 1. Heckscher-Ohlin Model 2. Testing the
Comparative Advantage Increasing Cost Model
G 652 Lectures 3, 4, and 5 omparative dvantage Increasing ost Model I. Review of the Ricardian Model ssumptions. Key assumptions. constant costs (Ms don t change as output levels change along F) 2. consumer
Costs. Lecture 5. August Reading: Perlo Chapter 7 1 / 63
Costs Lecture 5 Reading: Perlo Chapter 7 August 2015 1 / 63 Introduction Last lecture, we discussed how rms turn inputs into outputs. But exactly how much will a rm wish to produce? 2 / 63 Introduction
Econ Homework 4 - Answers ECONOMIC APPLICATIONS OF CONSTRAINED OPTIMIZATION. 1. Assume that a rm produces product x using k and l, where
Econ 4808 - Homework 4 - Answers ECONOMIC APPLICATIONS OF CONSTRAINED OPTIMIZATION Graded questions: : A points; B - point; C - point : B points : B points. Assume that a rm produces product x using k
INTERNATIONAL TRADE: THEORY AND POLICY (HO)
INTERNATIONAL ECONOMIC POLICY AND DEVELOPMENT AA 2017-2018 INTERNATIONAL TRADE: THEORY AND POLICY (HO) PROF. PIERLUIGI MONTALBANO pierluigi.montalbano@uniroma1.it Repetita iuvant KEY POINTS of the Ricardian
GE in production economies
GE in production economies Yossi Spiegel Consider a production economy with two agents, two inputs, K and L, and two outputs, x and y. The two agents have utility functions (1) where x A and y A is agent
Problem Set 4 - Answers. Specific Factors Models
Page 1 of 5 1. In the Extreme Specific Factors Model, a. What does a country s excess demand curve look like? The PPF in the Extreme Specific Factors Model is just a point in goods space (X,Y space). Excess
Ecn Intermediate Microeconomic Theory University of California - Davis November 13, 2008 Professor John Parman. Midterm 2
Ecn 100 - Intermediate Microeconomic Theory University of California - Davis November 13, 2008 Professor John Parman Midterm 2 You have until 6pm to complete the exam, be certain to use your time wisely.
ECS2601 Oct / Nov 2014 Examination Memorandum. (1a) Raymond has a budget of R200. The price of food is R20 and the price of clothes is R50.
ECS2601 Oct / Nov 201 Examination Memorandum (1a) Raymond has a budget of R200. The price of food is R20 and the price of clothes is R50. (i) Draw a budget line, with food on the horizontal axis. (2) Clothes
University of Toronto November 28, ECO 100Y INTRODUCTION TO ECONOMICS Midterm Test # 2
Department of Economics Prof. Gustavo Indart University of Toronto November 28, 2008 SOLUTIONS ECO 100Y INTRODUCTION TO ECONOMICS Midterm Test # 2 LAST NAME FIRST NAME STUDENT NUMBER INSTRUCTIONS: 1. The
ECON 311 Winter Quarter, 2010 NAME: KEY Prof. Hamilton
ECON 311 Winter Quarter, 2010 NAME: KEY Prof. Hamilton FINAL EXAM 200 points 1. (30 points). A firm produces rubber gaskets using labor, L, and capital, K, according to a production function Q = f(l,k).
The Robinson Crusoe model; the Edgeworth Box in Consumption and Factor allocation
Econ 200B UCSD; Prof. R. Starr, Ms. Kaitlyn Lewis, Winter 2017; Notes-Syllabus I1 Notes for Syllabus Section I: The Robinson Crusoe model; the Edgeworth Box in Consumption and Factor allocation Overview:
CHAPTER 2 FOUNDATIONS OF MODERN TRADE THEORY: COMPARATIVE ADVANTAGE
CHAPTER 2 FOUNDATIONS OF MODERN TRADE THEORY: COMPARATIVE ADVANTAGE CHAPTER OVERVIEW This chapter introduces students to the foundations of modern trade theory which seeks to answer three questions: (1)
Chapter 12 GENERAL EQUILIBRIUM AND WELFARE. Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.
Chapter 12 GENERAL EQUILIBRIUM AND WELFARE Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved. 1 Perfectly Competitive Price System We will assume that all markets are
EconS Firm Optimization
EconS 305 - Firm Optimization Eric Dunaway Washington State University eric.dunaway@wsu.edu October 9, 2015 Eric Dunaway (WSU) EconS 305 - Lecture 18 October 9, 2015 1 / 40 Introduction Over the past two
Chapter 3. Consumer Behavior
Chapter 3 Consumer Behavior Question: Mary goes to the movies eight times a month and seldom goes to a bar. Tom goes to the movies once a month and goes to a bar fifteen times a month. What determine consumers
2. Equlibrium and Efficiency
2. Equlibrium and Efficiency 1 2.1 Introduction competition and efficiency Smith s invisible hand model of competitive economy combine independent decision-making of consumers and firms into a complete
FEEDBACK TUTORIAL LETTER. 1st SEMESTER 2018 ASSIGNMENT 2 INTERMEDIATE MICRO ECONOMICS IMI611S
FEEDBACK TUTORIAL LETTER 1st SEMESTER 2018 ASSIGNMENT 2 INTERMEDIATE MICRO ECONOMICS IMI611S 1 Course Name: Course Code: Department: INTERMEDIATE MICROECONOMICS IMI611S ACCOUNTING, ECONOMICS AND FINANCE
A PRODUCER OPTIMUM. Lecture 7 Producer Behavior
Lecture 7 Producer Behavior A PRODUCER OPTIMUM The Digital Economist A producer optimum represents a solution to a problem facing all business firms -- maximizing the profits from the production and sales
Chapter Seven. Topics. Economic Cost. Measuring Costs. Short-Run Costs. Long-Run Costs. Lower Costs in the Long Run. Cost of Producing Multiple Goods.
Chapter Seven Costs Topics Measuring Costs. Short-Run Costs. Long-Run Costs. Lower Costs in the Long Run. Cost of Producing Multiple Goods. 2009 Pearson Addison-Wesley. All rights reserved. 7-2 Economic
Exercise Sheet 3: Short solutions.
Exercise Sheet 3: Short solutions. Exercise 1 a) Since a LF a KF intensive. > a LC a KC, food is relatively labor intensive and clothing relatively capital b) Let Q C be the quantity of clothing produced,
Model Question Paper Economics - I (MSF1A3)
Model Question Paper Economics - I (MSF1A3) Answer all 7 questions. Marks are indicated against each question. 1. Which of the following statements is/are not correct? I. The rationality on the part of
Chapter 4 The Theory of Individual Behavior
Managerial Economics & Business Strategy Chapter 4 The Theory of Individual Behavior McGraw-Hill/Irwin Copyright 2010 by the McGraw-Hill Companies, Inc. All rights reserved. Overview I. Consumer Behavior
Lesson 11: Specific-Factors Model (continued)
International trade in the global economy 60 hours II Semester Luca Salvatici luca.salvatici@uniroma3.it Lesson 11: Specific-Factors Model (continued) 1 3 Earnings of Capital and Land Determining the Payments
Professor Bee Roberts. Economics 302 Practice Exam. Part I: Multiple Choice (14 questions)
Fall 1999 Economics 302 Practice Exam Professor Bee Roberts Part I: Multiple Choice (14 questions) 1. The law of demand (quantity demanded increases as price decreases) is always fulfilled for a normal
Lecture 15 - General Equilibrium with Production
Lecture 15 - General Equilibrium with Production 14.03 Spring 2003 1 General Equilibrium with Production 1.1 Motivation We have already discussed general equilibrium in a pure exchange economy, and seen
Chapter 4 Specific Factors and Income Distribution
Chapter 4 Specific Factors and Income Distribution Introduction If trade is so good for the economy, why is there such opposition? Two main reasons why international trade has strong effects on the distribution
A Closed Economy One-Period Macroeconomic Model
A Closed Economy One-Period Macroeconomic Model Chapter 5 Topics in Macroeconomics 2 Economics Division University of Southampton February 21, 2008 Chapter 5 1/40 Topics in Macroeconomics Closing the Model
Problem Set 5 Answers. A grocery shop is owned by Mr. Moore and has the following statement of revenues and costs:
1. Ch 7, Problem 7.2 Problem Set 5 Answers A grocery shop is owned by Mr. Moore and has the following statement of revenues and costs: Revenues $250,000 Supplies $25,000 Electricity $6,000 Employee salaries
Endowment differences: The Heckscher-Ohlin model
Endowment differences: The Heckscher-Ohlin model Robert Stehrer Version: April 7, 2013 A difference in the relative scarcity of the factors of production between one country and another is thus a necessary
Production. Any activity that creates present or future economic value (utility). The transformation of inputs into outputs
Production Any activity that creates present or future economic value (utility). The transformation of inputs into outputs Inputs can include categories such as: labour, capital, energy, land, entrepreneurship
Economics 370 Microeconomic Theory Problem Set 5 Answer Key
Economics 370 Microeconomic Theory Problem Set 5 Answer Key 1) In order to protect the wild populations of cockatoos, the Australian authorities have outlawed the export of these large parrots. An illegal
Tools of normative analysis
Tools of normative analysis Lecture 2 1 Welfare economics Need of tools to evaluate desirability of alternative policies ( states of the world ) WE helpful to understand when markets work or fail Microeoconomic
Gains from Trade. Rahul Giri
Gains from Trade Rahul Giri Contact Address: Centro de Investigacion Economica, Instituto Tecnologico Autonomo de Mexico (ITAM). E-mail: rahul.giri@itam.mx An obvious question that we should ask ourselves
This appendix discusses two extensions of the cost concepts developed in Chapter 10.
CHAPTER 10 APPENDIX MATHEMATICAL EXTENSIONS OF THE THEORY OF COSTS This appendix discusses two extensions of the cost concepts developed in Chapter 10. The Relationship Between Long-Run and Short-Run Cost
Understand general-equilibrium relationships, such as the relationship between barriers to trade, and the domestic distribution of income.
Review of Production Theory: Chapter 2 1 Why? Understand the determinants of what goods and services a country produces efficiently and which inefficiently. Understand how the processes of a market economy
ECO401 Quiz # 5 February 15, 2010 Total questions: 15
ECO401 Quiz # 5 February 15, 2010 Total questions: 15 Question # 1 of 15 ( Start time: 09:37:50 PM ) Total Marks: 1 Economic activity moves from a trough into a period of until it reaches a and then into
Assignment 1. Multiple-Choice Questions. To answer each question correctly, you have to choose the best answer from the given four choices.
ECON 3473 Economics of Free Trade Areas Instructor: Sharif F. Khan Department of Economics Atkinson College York University Winter 2007 Assignment 1 Part A Multiple-Choice Questions To answer each question
1/25/2011. Introduction to International Trade. Basic Theory of Trade
Introduction to International Trade Comparative Advantage and the Patterns of International Trade The Standard Trade Model and International Factor Movements A Trade-based Model of Exchange Rates Why Do
LONG RUN SHORT RUN COST MINIMIZATION. Labor is variable Capital is fixed Solve for: labor only
SHORT RUN Labor is variable Capital is fixed Solve for: labor only LONG RUN Labor is variable Capital is variable Solve for: labor and capital COST MINIMIZATION Conceptual Goal: 1. Find the cheapest way
Midterm Exam No. 2 - Answers. July 30, 2003
Page 1 of 9 July 30, 2003 Answer all questions, in blue book. Plan and budget your time. The questions are worth a total of 80 points, as indicated, and you will have 80 minutes to complete the exam. 1.
14.54 International Trade Lecture 13: Heckscher-Ohlin Model of Trade (I)
14.54 International Trade Lecture 13: Heckscher-Ohlin Model of Trade (I) 14.54 Week 9 Fall 2016 14.54 (Week 9) Heckscher-Ohlin Model Fall 2016 1 / 19 Today s Plan 1 2 3 HO model: Main Assumptions HO model:
Summer 2016 ECN 303 Problem Set #1
Summer 2016 ECN 303 Problem Set #1 Due at the beginning of class on Monday, May 23. Give complete answers and show your work. The assignment will be graded on a credit/no credit basis. In order to receive
Advanced Microeconomics
Advanced Microeconomics Pareto optimality in microeconomics Harald Wiese University of Leipzig Harald Wiese (University of Leipzig) Advanced Microeconomics 1 / 33 Part D. Bargaining theory and Pareto optimality
Econ 110: Introduction to Economic Theory. 10th Class 2/11/11
Econ 110: Introduction to Economic Theory 10th Class 2/11/11 go over practice problems second of three lectures on producer theory Last time we showed the first type of constraint operating on the firm:
1. Suppose a production process is described by a Cobb-Douglas production function f(v 1, v 2 ) = v 1 1/2 v 2 3/2.
1. Suppose a production process is described by a Cobb-Douglas production function f(v 1, v 2 ) = v 1 1/2 v 2 3/2. a. Write an expression for the marginal product of v 1. Does the marginal product of v
Lecture 3: Consumer Choice
Lecture 3: Consumer Choice September 15, 2015 Overview Course Administration Ripped from the Headlines Quantity Regulations Consumer Preferences and Utility Indifference Curves Income and the Budget Constraint
The Standard Theory of International Trade
The Standard Theory of International Trade chapter LEARNING GOALS: After reading this chapter, you should be able to: Understand how relative commodity prices and the comparative advantage of nations are
Chapter 6. The Standard Trade Model
Chapter 6 The Standard Trade Model Preview Relative supply and relative demand The terms of trade and welfare Effects of economic growth, import tariffs, and export subsidies International borrowing and
The Theory of the Firm
The Theory of the Firm I. Introduction: A Schematic Comparison of the Neoclassical Approaches to the Studies Between the Theories of the Consumer and the Firm A. The Theory of Consumer Choice: Consumer
Lecture 4: Consumer Choice
Lecture 4: Consumer Choice September 18, 2018 Overview Course Administration Ripped from the Headlines Consumer Preferences and Utility Indifference Curves Income and the Budget Constraint Making a Choice
Leader: Shealyn Course: Econ 101 Instructor: Peter Orazem Date: April 17, 2012
Supplemental Instruction Iowa State University Practice Exam *graphs will be provided in the session. 1) Which graph below shows marginal utility? 2) Which one shows total utility? Leader: Shealyn Course:
Factor endowments and trade I (Part A)
Factor endowments and trade I (Part A) Robert Stehrer The Vienna Institute for International Economic Studies - wiiw May 7, 2014 Basic assumptions 1 2 factors which are used in both sectors 1 Fully mobile
MODULE No. : 9 : Ordinal Utility Approach
Subject Paper No and Title Module No and Title Module Tag 2 :Managerial Economics 9 : Ordinal Utility Approach COM_P2_M9 TABLE OF CONTENTS 1. Learning Outcomes: Ordinal Utility approach 2. Introduction:
Problems. units of good b. Consumers consume a. The new budget line is depicted in the figure below. The economy continues to produce at point ( a1, b
Problems 1. The change in preferences cannot change the terms of trade for a small open economy. Therefore, production of each good is unchanged. The shift in preferences implies increased consumption
Preferences. Rationality in Economics. Indifference Curves
Preferences Rationality in Economics Behavioral Postulate: A decisionmaker always chooses its most preferred alternative from its set of available alternatives. So to model choice we must model decisionmakers
MICROECONOMIC THEORY 1
MICROECONOMIC THEORY 1 Lecture 2: Ordinal Utility Approach To Demand Theory Lecturer: Dr. Priscilla T Baffour; ptbaffour@ug.edu.gh 2017/18 Priscilla T. Baffour (PhD) Microeconomics 1 1 Content Assumptions
Economics 386-A1. Practice Assignment 3. S Landon Fall 2003
Economics 386-A1 Practice Assignment 3 S Landon Fall 003 This assignment will not be graded. Answers will be made available on the Economics 386 web page: http://www.arts.ualberta.ca/~econweb/landon/e38603.html.
Microeconomics Review in a Two Good World
Economics 131 ection Notes GI: David Albouy Microeconomics Review in a Two Good World Note: These notes are not meant to be a substitute for attending section. It may in fact be difficult to understand
This is The Heckscher-Ohlin (Factor Proportions) Model, chapter 5 from the book Policy and Theory of International Trade (index.html) (v. 1.0).
This is The Heckscher-Ohlin (Factor Proportions) Model, chapter 5 from the book Policy and Theory of International Trade (index.html) (v. 1.0). This book is licensed under a Creative Commons by-nc-sa 3.0
Economic cost. Full accounting of cost to society. There are counterfactual, competing allocations that underlie this concept.
McPeak Lecture 7 PAI 897 Costs. We are leaving selling price / revenue out of the picture for the moment, but we are adding in the issue of input costs. Economic cost. Full accounting of cost to society.
Welfare Economics. Jan Abrell Centre for Energy Policy and Economics (CEPE) D-MTEC, ETH Zurich. Welfare Economics
Welfare Economics Jan Abrell Centre for Energy Policy and Economics (CEPE) D-MTEC, ETH Zurich Welfare Economics 06.03.2018 1 Outline So far Basic Model Economic Efficiency Optimality Market Economy Partial