Lecture 7: The Theory of Demand. Where does demand come from? What factors influence choice? A simple model of choice
|
|
- Ruth Bishop
- 5 years ago
- Views:
Transcription
1 Leture : The Theory of Demand Leture : The he Theory of Demand Readings: Chapter 9 Where does demand ome from? Sarity enourages rational deision-maing over household onsumption hoies. Rational hoie leads to purhase deisions whih leads to the soial phenomenon of demand. What fators influene hoie? An individual s hoies are influened by: what they an afford, We therefore build our theory of demand on a theory of rational individual hoie. (Methodologial Individualism) their preferenes. How are onsumption deisions made? Searh the person s affordable set to find the onsumption hoie that provides the highest level of satisfation given her preferenes. roblem: How does a rational individual searh the family s affordable set to find the best hoie? Solution: We need a simple model of preferenes to explore this deision problem. A simple model of hoie Choie an be modeled as the result of an interation between: 1. Affordable Set (or onsumption possibilities) Family inome (M) and pries () of goods and servies given defines a family s affordable set M The budget line is the boundary between affordable and unaffordable onsumption hoies M = n n. referenes Indifferene Map n n
2 A simple appliation of the model: As before we will simplify the model by having only two ommodities pop and movies. The budget line simplifies dramatially M = op op + Example: Suppose that inome is $, the prie of a movie is $, and the prie of a pop is $. = + op op The Affordable Set a b Affordable Set Inome op d $ $ $ Unaffordable e f Budget line 1 9 Textboo p. 19 Affordable Set and the Budget Line op a b d M = + op op M m = m e Affordable Set Interepts measure real inome in movies (x-interept) pop (y-interept) m steeper budget line, fixed pop-interept p flatter budget line, fixed movie-interept M rightward parallel shift budget line f 1 9 Textboo p. 19 referenes and Indifferene Curves Indifferene urves oin ombinations goods giving equal satisfation generally slope downward and bow towards origin farther from origin levels of satisfation never interset
3 op A referene Map l g I referenes and Indifferene Curves Marginal Rate of Substitution (MRS) magnitude of slope of indifferene urve diminishing marginal rate of substitution MRS as move down along indifferene urve substitutability between goods straighter indifferene urves substitutability between goods more tightly urved indifferene urves Textboo p.1 The Marginal Rate of Substitution The Household's Consumption Choie op MRS = MRS = 1 g At the best affordable point: eah household spends all its inome and ahieves maximum satisfation. eah household s budget line and indifferene urve have same slope MRS = relative prie Despite the fat that every household hooses a different onsumption bundle, every household will have the same MRS as every other household beause they fae the same pries. Textboo p. 1 The Best Affordable oint rediting Consumer Behaviour op l i l Best affordable point rie effet = onsumption resulting from prie of good To analyze the prie effet, onsider our example in whih a person with $ must deide how muh of his money to spend on movies and pop. h Suppose the prie of movies falls from $ to $, while the prie of pop stayed onstant at $. Textboo p. 1 This will alter the affordable set (budget line). ontinued
4 rediting Consumer Behaviour rie Effet To see how it affets the budget line onsider the following two ases. op $ If all the $ is spent on movies, a redution in the prie of movies from $ to $ maes it possible to onsume as many as movies. If however, the individual spends all $ on pop, the redution of the prie of movies would not hange his onsumption. Clearly the budget line hinges out. l $ Textboo p. 1 op rie Effet and Demand Curve l Individual and Maret Demand The last table shows how individual demand is related to individual hoie given preferenes and an affordable set. a b Textboo p. 1 : Where does maret demand ome from? A: Maret Demand Maret demand urve is simply the sum of individual demand. Graphially this is the horizontal sum of individual demand urves Individual and Maret Demand Curves: Lisa s Demand Individual and Maret Demand Curves: Chu s Demand Lisa s demand Chu s demand Textboo p. 1 Textboo p. 1
5 Individual and Maret Demand Curves: Maret Demand Individual and Maret Demand Curves Maret demand (a) (b) () Lisa s demand Chu s demand Maret demand Textboo p. 1 Textboo p. 1 rediting Consumer Behaviour rediting Consumer Behaviour : What determines the elastiity of demand? A: The size of the prie effet. : What determines the size of the prie effet? A: rie effet = substitution effet + inome effet Substitution effet prie onsumption Inome effet for normal goods, (hypothetial) inome onsumption for inferior goods, (hypothetial) inome onsumption ontinued op Inome Effet Inome Effet and Change in Demand op Inome $1 Inome $ l Textboo p. 19 b 199 Addison-Wesley ublishers Ltd. D 1 D l Textboo p. 19
6 op rie Effet Inome $ $ op Substitution Effet Inome $ $ Inome $ $ l Inome $1 $ l Textboo p. 1 Textboo p. 1 op Inome Effet Inome $ $ rie Effet = Substitution Effet + Inome Effet op Inome $, $ Inome $, $ Inome $1 $ l l Textboo p. 1 Textboo p. 1 rediting Consumer Behaviour rediting Consumer Behaviour For normal goods For inferior goods substitution and inome effets wor in same diretion substitution and inome effets wor in opposite diretions Example: movies both onsumption and inome effet push movies Example: bus substitution effet auses bus, but inome effet auses bus Impliation: Normal goods tend to be prie elasti in demand. Impliation: Inferior goods tend to be prie inelasti in demand.
7 Value and Demand Theory Value and Demand Theory Demand Theory an do more than explain The reason for this belief in a disonnetion demand. It sheds light on questions about value. between maret value and use value is found in : What do maret values have to do with human values? Many believe that maret values are often at odds with human values? A: Eonomists used to believe there was no onnetion between the exhange value (maret prie) and the use value (intrinsi value) of The Water Diamond aradox: Water has enormous use value but has a low prie, while a diamond has little use value yet has a high prie. This seems to suggest that there is no onnetion between maret prie and use value. ommodities. Value and Demand Theory Value and Demand Theory : Is there no onnetion between maret value : What is the benefit from partiipating in (prie) and use value? marets if you are a buyer? A: No! There is an important onnetion. eople will only partiipate if the prie is lower Water is plentiful. Even though the total than the value they plae on the good. utility from water is high, the marginal utility is low. Diamonds are sare and while the total utility is low, the marginal utility is high. This reates a onsumer surplus that the buyer realizes from her purhase. Marginal analysis shows us the lin between maret prie and use value. Consumer Surplus: Individual Consumer Surplus: Maret Maximum pries willing to pay for 1,,, and movies Maret prie Maret prie 1 Consumer surplus D 1 Consumer surplus D 1 Textboo p Textboo p. 11
8 The model of onsumer hoie an be used to study the alloation of time between wor and leisure. The two goods are leisure and inome where inome represents all other goods. Lisa buys leisure by not supplying labour and by forgoing inome. So the prie of leisure is the wage rate forgone. The labour Supply Curve By hanging the wage rate, we an find a person s labour supply urve. An inrease in the wage rate maes leisure relatively more expensive (higher opportunity ost to not woring) and has a substitution effet towards less leisure (towards more wor). A higher wage also has a positive inome effet on leisure. If the inome effet is weaer than the substitution effet, the quantity of wor hours inreases as the wage rate rises. When the wage rate rises from $ to $ an hour, wor inreases from to hours a wee the move from A to B. But if the inome effet is stronger than the substitution effet, the quantity of wor hours dereases as the wage rate rises. When the wage rate rises from $ to $1 an hour, wor dereases from to hours a wee the move from B to C. The move from A to B when the wage rate inreases from $ to $ an hour means that the labour supply urve slopes upward over this range.
9 The move from B to C when the wage rate inreases from $ to $1 an hour means that the labour supply urve bends bawards above a ertain wage rate. Historial evidene shows that the average worwee has fallen steadily as the wage rate has inreased. With higher wage rates, people have deided to use their higher inomes in part to buy more leisure. End of Leture
Economics 001 Principles of Microeconomics
Eonomis 001 riniples of Miroeonomis Leture 9 household hoie budgets indifferene urves MRS demand again rofessor Arik Levinson Moving from point B to point A, right and down the (straight line) demand urve
More informationEconomics 2202 (Section 05) Macroeconomic Theory Practice Problem Set 3 Suggested Solutions Professor Sanjay Chugh Fall 2014
Department of Eonomis Boston College Eonomis 2202 (Setion 05) Maroeonomi Theory Pratie Problem Set 3 Suggested Solutions Professor Sanjay Chugh Fall 2014 1. Interation of Consumption Tax and Wage Tax.
More informationCONSUMPTION-LEISURE FRAMEWORK SEPTEMBER 20, 2010 THE THREE MACRO (AGGREGATE) MARKETS. The Three Macro Markets. Goods Markets.
CONSUMPTION-LEISURE FRAMEWORK SEPTEMBER 20, 2010 The Three Maro Markets THE THREE MACRO (AGGREGATE) MARKETS Goods Markets P Labor Markets Capital/Savings/Funds/Asset Markets interest rate labor Will put
More informationCONSUMPTION-LABOR FRAMEWORK SEPTEMBER 19, (aka CONSUMPTION-LEISURE FRAMEWORK) THE THREE MACRO (AGGREGATE) MARKETS. The Three Macro Markets
CONSUMPTION-LABOR FRAMEWORK (aka CONSUMPTION-LEISURE FRAMEWORK) SEPTEMBER 19, 2011 The Three Maro Markets THE THREE MACRO (AGGREGATE) MARKETS Goods Markets P Labor Markets Finanial/Capital/Savings/Asset
More informationProblem Set 8 Topic BI: Externalities. a) What is the profit-maximizing level of output?
Problem Set 8 Topi BI: Externalities 1. Suppose that a polluting firm s private osts are given by TC(x) = 4x + (1/100)x 2. Eah unit of output the firm produes results in external osts (pollution osts)
More informationEconomics 325 Intermediate Macroeconomic Analysis Practice Problem Set 1 Suggested Solutions Professor Sanjay Chugh Spring 2011
Department of Eonomis Universit of Marland Eonomis 35 Intermediate Maroeonomi Analsis Pratie Problem Set Suggested Solutions Professor Sanja Chugh Spring 0. Partial Derivatives. For eah of the following
More informationEconomics 602 Macroeconomic Theory and Policy Problem Set 4 Suggested Solutions Professor Sanjay Chugh Summer 2010
Department of Applied Eonomis Johns Hopkins University Eonomis 6 Maroeonomi Theory and Poliy Prolem Set 4 Suggested Solutions Professor Sanjay Chugh Summer Optimal Choie in the Consumption-Savings Model
More informationIS-LM model. Giovanni Di Bartolomeo Macro refresh course Economics PhD 2012/13
IS-LM model Giovanni Di Bartolomeo giovanni.dibartolomeo@uniroma.it Note: These leture notes are inomplete without having attended letures IS Curve Giovanni Di Bartolomeo giovanni.dibartolomeo@uniroma.it
More informationAt a cost-minimizing input mix, the MRTS (ratio of marginal products) must equal the ratio of factor prices, or. f r
ECON 311 NAME: KEY Fall Quarter, 2011 Prof. Hamilton Final Exam 200 points 1. (30 points). A firm in Los Angeles produes rubber gaskets using labor, L, and apital, K, aording to a prodution funtion Q =
More informationEcon 455 Answers - Problem Set Consider a small country (Belgium) with the following demand and supply curves for cloth:
Spring 000 Eon 455 Harvey Lapan Eon 455 Answers - Problem Set 4 1. Consider a small ountry (Belgium) with the following demand and supply urves for loth: Supply = 3P ; Demand = 60 3P Assume Belgium an
More informationPossibilities, Preferences, and Choices
9 Possibilities, Preferences, and Choices Learning Objectives Household s budget line and show how it changes when prices or income change Use indifference curves to map preferences and explain the principle
More informationTOTAL PART 1 / 50 TOTAL PART 2 / 50
Department of Eonomis University of Maryland Eonomis 35 Intermediate Maroeonomi Analysis Midterm Exam Suggested Solutions Professor Sanjay Chugh Fall 009 NAME: Eah problem s total number of points is shown
More informationSay you have $X today and can earn an annual interest rate r by investing it. Let FV denote the future value of your investment and t = time.
Same as with Labor Supply, maximizing utility in the ontext of intertemporal hoies is IDEN- TICAL to what we ve been doing, just with a different budget onstraint. Present and Future Value Say you have
More informationTransport tax reforms, two-part tariffs, and revenue recycling. - A theoretical result
Transport tax reforms, to-part tariffs, and revenue reyling - A theoretial result Abstrat Jens Erik Nielsen Danish Transport Researh Institute We explore the interation beteen taxes on onership and on
More informationThis article attempts to narrow the gap between
Evan F. Koenig Senior Eonomist and Poliy Advisor Rethinking the IS in IS LM: Adapting Keynesian Tools to Non-Keynesian Eonomies Part 1 This artile attempts to narrow the gap between two maroeonomi paradigms
More informationAP Macro Economics Review
AP Maro Eonomis Review Prodution Possibility Curve Capital goods Capital goods P r i e B2 B Pe B C upply 2 A Market Equilibrium W Consumer goods F emand E Consumer goods A hange in emand versus a hange
More informationPOSSIBILITIES, PREFERENCES, AND CHOICES
9 POSSIBILITIES, PREFERENCES, AND CHOICES You buy your music online and play it on an ipod. As the prices of a music download and an ipod have tumbled, the volume of downloads and sales of ipods have
More information14.02 Principles of Macroeconomics Quiz # 1, Answers
4. Priniples of Maroeonois Quiz #, Answers Part I.. False. The GDP deflator is the ratio of noinal to real GDP it is a easure of the overall prie level of the eonoy. The CPI is the ost of a given list
More information0NDERZOEKSRAPPORT NR TAXES, DEBT AND FINANCIAL INTERMEDIARIES C. VAN HULLE. Wettelijk Depot : D/1986/2376/4
0NDERZOEKSRAPPORT NR. 8603 TAXES, DEBT AND FINANCIAL INTERMEDIARIES BY C. VAN HULLE Wettelijk Depot : D/1986/2376/4 TAXES, DEBT AND FINANCIAL INTERMEDIARIES Muh lending and borrowing is indiret : finanial
More informationOutput and Expenditure
2 Output and Expenditure We begin with stati models of the real eonomy at the aggregate level, abstrating from money, pries, international linkages and eonomi growth. Our ausal perspetive depends on what
More informationFOREST CITY INDUSTRIAL PARK FIN AN CIAL RETURNS EXECUTIVE SUMMARY
FOREST CITY INDUSTRIAL PARK FIN AN CIAL RETURNS EXECUTIVE SUMMARY The City of London is engagedl in industrial land development for the sole purpose of fostering eonomi growth. The dynamis of industrial
More informationResearch Article The Real Causes of Inflation
Current Researh Journal of Eonomi Theory 7(1): 1-10, 2015 ISSN: 2042-4841, e-issn: 2042-485X 2015 Maxwell Sientifi Publiation Corp. Submitted: Otober 12, 2014 Aepted: January 27, 2015 Published: May 20,
More informationConsumption smoothing and the welfare consequences of social insurance in developing economies
Journal of Publi Eonomis 90 (2006) 2351 2356 www.elsevier.om/loate/eonbase Consumption smoothing and the welfare onsequenes of soial insurane in developing eonomies Raj Chetty a,, Adam Looney b a UC-Berkeley
More informationConsumer Choice and Demand
Consumer Choice and Demand CHAPTER12 C H A P T E R C H E C K L I S T When you have completed your study of this chapter, you will be able to 1 Calculate and graph a budget line that shows the limits to
More informationState of New Mexico Participation Agreement for Deferred Compensation Plan
State of New Mexio Partiipation Agreement for Deferred Compensation Plan DC-4068 (06/2016) For help, please all 1-866-827-6639 www.newmexio457d.om 1 Things to Remember Please print Payroll Center/Plan
More informationd. What to produce? How to produce? For whom to produce?
1. Whih of the following best esribes the three funamental eonomi questions? a. What to proue, when to proue, an where to proue. b. What time to proue, what plae to proue, an how to proue.. What to proue,
More information2010 Pearson Education Canada
Consumption Possibilities Household consumption choices are constrained by its income and the prices of the goods and services available. The budget line describes the limits to the household s consumption
More informationImagine barriers between you and other buyers or sellers: legal, spatial, social, or temporal
Deentralized Trade Imagine barriers between you and other buyers or sellers: legal, spatial, soial, or temporal These barriers redue the set of goods you an trade, and this redues welfare in some sense
More informationAUTHOR COPY. The co-production approach to service: a theoretical background
Journal of the Operational Researh Soiety (213), 1 8 213 Operational Researh Soiety td. All rights reserved. 16-5682/13 www.palgrave-journals.om/jors/ The o-prodution approah to servie: a theoretial bakground
More informationNBER WORKING PAPER SERIES MYOPIA AND THE EFFECTS OF SOCIAL SECURITY AND CAPITAL TAXATION ON LABOR SUPPLY. Louis Kaplow
NBER WORKING PAPER SERIES MYOPIA AND THE EFFECTS OF SOCIAL SECURITY AND CAPITAL TAXATION ON LABOR SUPPLY Louis Kaplow Working Paper 45 http://www.nber.org/papers/w45 NATIONAL BUREAU OF ECONOMIC RESEARCH
More informationPensions Increase (Annual Review) Order 2015 PENSIONS INCREASE (ANNUAL REVIEW) ORDER 2015
Pensions Inrease (Annual Review) Order 2015 Index PENSIONS INCREASE (ANNUAL REVIEW) ORDER 2015 Index Artile Page 1 Title... 3 2 Commenement... 3 3 Interpretation.3 4 Pension Inrease.. 4 5 Inrease in ertain
More informationDynamic Pricing of Di erentiated Products
Dynami Priing of Di erentiated Produts Rossitsa Kotseva and Nikolaos Vettas August 6, 006 Abstrat We examine the dynami priing deision of a rm faing random demand while selling a xed stok of two di erentiated
More informationExplanatory Memorandum
IN THE KEYS HEAVILY INDEBTED POOR COUNTRIES (LIMITATION ON DEBT RECOVERY) BILL 202 Explanatory Memorandum. This Bill is promoted by the Counil of Ministers. 2. Clause provides for the short title of the
More informationLecture 6 International Trade Theory 1/2008 The Specific Factor Model Kornkarun Kungpanidchakul, Ph.D
Leture 6 International Trade Theory 1/2008 The Seii Fator Model Kornkarun Kunganidhakul, Ph.D The seii ator model is one o the attemt to imrove the Heksher- Ohlin model by removing the assumtion that both
More informationEconomics. The Theory of Consumer Choice 11/8/2012. Introduction. Principles of. The budget constraint. Answers
/8/22 N. Gregory Mankiw Principles of Economics Sixth Edition 2 The Theory of onsumer hoice Modified by Joseph Tao-yi Wang Premium PowerPoint Slides by Ron ronovich In this chapter, look for the answers
More informationPOSSIBILITIES, PREFERENCES, AND CHOICES
Chapt er 9 POSSIBILITIES, PREFERENCES, AND CHOICES Key Concepts Consumption Possibilities The budget line shows the limits to a household s consumption. Figure 9.1 graphs a budget line. Consumption points
More informationAnalysing the Distributional Impacts of Stablisation Policy with a CGE Model: Illustrations and Critique for Zimbabwe
Analysing the Distributional Impats of Stablisation Poliy with a CGE Model: Illustrations and Critique for Zimbabwe Sonja Fagernäs Eonomi and Statistis Analysis Unit April 2004 ESAU Working Paper 4 Overseas
More information8 POSSIBILITIES, PREFERENCES, AND CHOICES. Chapter. Key Concepts. The Budget Line
Chapter 8 POSSIBILITIES, PREFERENCES, AND CHOICES Key Concepts FIGURE 8. The Budget Line Consumption Possibilities The budget shows the limits to a household s consumption. Figure 8. graphs a budget ;
More informationEconomics of Strategy (ECON 4550) Maymester 2015 Game Theoretic Models of Oligopoly
Eonomis of trategy (ECN 55) Maymester 5 Game Theoreti Models of ligooly Reading: The Right Game: Use Game Theory to hae trategy (ECN 55 Courseak, Page 5) and Partsometer Priing (ECN 55 Courseak, Page )
More informationPROSPECTUS May 1, Agency Shares
Dreyfus Institutional Reserves Funds Dreyfus Institutional Reserves Money Fund Class/Tiker Ageny shares DRGXX Dreyfus Institutional Reserves Treasury Fund Class/Tiker Ageny shares DGYXX Dreyfus Institutional
More informationImportantly, note that prices are not functions of the expenditure on advertising that firm 1 makes during the first period.
ECONS 44 STRATEGY AND GAME THEORY HOMEWORK #4 ANSWER KEY Exerise - Chapter 6 Watson Solving by bakward indution:. We start from the seond stage of the game where both firms ompete in pries. Sine market
More informationConsumer 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
More informationDISCUSSION PAPER SERIES. No MARKET SIZE, ENTREPRENEURSHIP, AND INCOME INEQUALITY. Kristian Behrens, Dmitry Pokrovsky and Evgeny Zhelobodko
DISCUSSION PAPER SERIES No. 9831 MARKET SIZE, ENTREPRENEURSHIP, AND INCOME INEQUALITY Kristian Behrens, Dmitry Pokrovsky and Evgeny Zhelobodko INTERNATIONAL TRADE AND REGIONAL ECONOMICS ABCD www.epr.org
More informationRetail-Collection Network Design under Deposit-Refund
etail-colletion Networ Design under Deposit-efund io Wojanowsi, Vedat Verter * and Tamer Boyai Faulty of Management MGill University Montreal, Quebe H3A 1G5, Canada Anowledgements: This researh has been
More informationThe Rational Consumer. The Objective of Consumers. The Budget Set for Consumers. Indifference Curves are Like a Topographical Map for Utility.
The Rational Consumer The Objective of Consumers 2 Finish Chapter 8 and the appendix Announcements Please come on Thursday I ll do a self-evaluation where I will solicit your ideas for ways to improve
More informationIndicate the answer choice that best completes the statement or answers the question.
Indiate the answer hoie that best ompletes the statement or answers the question. Find the unit rate of 18 teaspoons for 3 ups. a) 6 teaspoons/up b) 15 teaspoons/up ) 54 teaspoons/up d) 18 teaspoons/up
More informationON TRANSACTION COSTS IN STOCK TRADING
QUANTITATIVE METHODS IN ECONOMICS Volume XVIII, No., 07, pp. 58 67 ON TRANSACTION COSTS IN STOCK TRADING Marek Andrzej Koiński Faulty of Applied Informatis and Mathematis Warsaw University of Life Sienes
More informationECNB , Spring 2003 Intermediate Microeconomics Saint Louis University. Midterm 2
, Spring 2003 Intermediate Microeconomics Saint Louis University Multiple Choice (4 points each) Midterm 2 Name: 1) If Fred's marginal rate of substitution of salad for pizza equals -3, then A) his marginal
More informationConsumer Theory. Introduction Budget Set/line Study of Preferences Maximizing Utility
Consumer Theory Introduction Budget Set/line Study of Preferences Maximizing Utility Introduction Where does the law of demand come from? Consumption choices depend on two factors: 1. What choices you
More informationClass Notes: Week 6. Multinomial Outcomes
Ronald Hek Class Notes: Week 6 1 Class Notes: Week 6 Multinomial Outomes For the next ouple of weeks or so, we will look at models where there are more than two ategories of outomes. Multinomial logisti
More informationThe effect of oil price shocks on economic growth (Case Study; Selected Oil Exporting Countries)
Tehnial Journal of Engineering and Applied Sienes Available online at www.tjeas.om 2013 TJEAS Journal-2013-3-17/2118-2122 ISSN 2051-0853 2013 TJEAS The effet of oil prie shoks on eonomi growth (Case Study;
More informationIMPACTS OF FOREIGN SAVINGS INFLOWS ON THE PALESTINIAN ECONOMY: A CGE ANALYSIS
International Journal of Eonomis, Commere and Management United Kingdom Vol. II, Issue 12, De 2014 http://ijem.o.uk/ ISSN 2348 0386 IMPACTS OF FOREIGN SAVINGS INFLOWS ON THE PALESTINIAN ECONOMY: A CGE
More informationTax-loss Selling and the Turn-of-the-Year Effect: New Evidence from Norway 1
Tax-loss Selling and the Turn-of-the-Year Effet: New Evidene from Norway 1 Qinglei Dai Universidade Nova de Lisboa July 2007 1 Aknowledgement: I would like to thank Kristian Rydqvist at Binghamton University,
More informationThe Theory of Consumer Choice. UAPP693 Economics in the Public & Nonprofit Sectors Steven W. Peuquet, Ph.D.
The Theory of Consumer Choice UAPP693 Economics in the Public & Nonprofit Sectors Steven W. Peuquet, Ph.D. 1 These slides are for use only as part of a formal instructional course and may not be copied,
More informationMicroeconomics (for MBA students)
In the Name of God Sharif University of Technology Graduate School of Management and Economics Microeconomics (for MBA students) 44111 (1393-94 1 st term) - Group 2 Dr. S. Farshad Fatemi Consumer Choice
More informationT R A D E A N D I N D U S T R I A L P O L I C Y S T R A T E G I E S
Working Paper 1-2004 A Dynami Computable General Equilibrium (CGE) Model for South Afria: Extending the Stati IFPRI Model James Thurlow T R A D E A N D I N D U S T R I A L P O L I C Y S T R A T E G I E
More informationWho faces higher prices? An empirical analysis based on Japanese homescan data 1. Kyosuke Shiotani (Bank of Japan 3 ) Abstract
Who faes higher pries? An empirial analysis based on Japanese homesan data 1 Naohito Abe 2 (Hitotsubashi University) and Kyosuke Shiotani (Bank of Japan 3 ) Abstrat On the basis of Japanese household-level
More informationSource versus Residence Based Taxation with International Mergers and Acquisitions
Soure versus Residene Based Taxation with International Mergers and Aquisitions Johannes Beker Clemens Fuest CESIFO WORKING PAPER NO. 2854 CATEGORY 1: PUBLIC FINANCE NOVEMBER 2009 An eletroni version of
More informationARTICLE IN PRESS. Journal of Health Economics xxx (2011) xxx xxx. Contents lists available at SciVerse ScienceDirect. Journal of Health Economics
Journal of Health Eonomis xxx (20) xxx xxx Contents lists available at SiVerse SieneDiret Journal of Health Eonomis j ourna l ho me page: www.elsevier.om/loate/eonbase Optimal publi rationing and prie
More informationSequential Procurement Auctions and Their Effect on Investment Decisions
Sequential Prourement Autions and Their Effet on Investment Deisions Gonzalo isternas Niolás Figueroa November 2007 Abstrat In this paper we haraterize the optimal prourement mehanism and the investment
More informationMyopia and the Effects of Social Security and Capital Taxation on Labor Supply
NELLCO NELLCO Legal Sholarship Repository Harvard Law Shool John M. Olin Center for Law, Eonomis and Business Disussion Paper Series Harvard Law Shool 8-5-006 Myopia and the Effets of Soial Seurity and
More informationTrade Scopes across Destinations: Evidence from Chinese Firm
MPRA Munih Personal RePE Arhive Trade Sopes aross Destinations: Evidene from Chinese Firm Zhuang Miao and Yifan Li MGill University 15 Marh 2017 Online at https://mpra.ub.uni-muenhen.de/80863/ MPRA Paper
More informationLiquidity risk and contagion in interbank markets: a presentation of Allen and Gale Model
MPRA Munih Personal RePE Arhive Liquidity risk and ontagion in interbank markets: a presentation of Allen and Gale Model El Mehdi FERROUHI and Abderrassoul LEHADIRI Mohammed V Agdal University (Rabat),
More informationOptimal Monetary Policy in a Model of the Credit Channel
Optimal Monetary Poliy in a Model of the Credit Channel Fiorella De Fiore European Central Bank Oreste Tristani y European Central Bank 9 July 8 Preliminary and Inomplete Abstrat We onsider a simple extension
More informationnot to be republished NCERT Chapter 2 Consumer Behaviour 2.1 THE CONSUMER S BUDGET
Chapter 2 Theory y of Consumer Behaviour In this chapter, we will study the behaviour of an individual consumer in a market for final goods. The consumer has to decide on how much of each of the different
More informationTHEORETICAL TOOLS OF PUBLIC FINANCE
Solutions and Activities for CHAPTER 2 THEORETICAL TOOLS OF PUBLIC FINANCE Questions and Problems 1. The price of a bus trip is $1 and the price of a gallon of gas (at the time of this writing!) is $3.
More informationTaxation and Fiscal Expenditure in a Growth Model with Endogenous Fertility
Disussion Paper No. 2015-35 May 08, 2015 http://www.eonomis-ejournal.org/eonomis/disussionpapers/2015-35 Taxation and Fisal Expenditure in a Growth Model with Endogenous Fertility Norman Sedgley and Brue
More informationMarginal Utility, Utils Total Utility, Utils
Mr Sydney Armstrong ECN 1100 Introduction to Microeconomics Lecture Note (5) Consumer Behaviour Evidence indicated that consumers can fulfill specific wants with succeeding units of a commodity but that
More informationThe Rational Consumer. The Objective of Consumers. Maximizing Utility. The Budget Set for Consumers. Slope =
The Rational Consumer The Objective of Consumers 2 Chapter 8 and the appendix Announcements We have studied demand curves. We now need to develop a model of consumer behavior to understand where demand
More informationExogenous Information, Endogenous Information and Optimal Monetary Policy
Exogenous Information, Endogenous Information and Optimal Monetary Poliy Luigi Paiello Einaudi Institute for Eonomis and Finane Mirko Wiederholt Northwestern University November 2010 Abstrat Most of the
More informationContending with Risk Selection in Competitive Health Insurance Markets
This paper is prepared for presentation at the leture, Sikness Fund Compensation and Risk Seletion at the annual meeting of the Verein für Soialpolitik, Bonn, Germany September 29, 2005. September 19,
More informationPrinciple of Microeconomics
Principle of Microeconomics Chapter 21 Consumer choices Elements of consumer choices Total amount of money available to spend. Price of each item consumers on a perfectly competitive market are price takers.
More informationStudy on Rural Microfinance System s Defects and Risk Control Based on Operational Mode
International Business and Management Vol. 10, No. 2, 2015, pp. 43-47 DOI:10.3968/6807 ISSN 1923-841X [Print] ISSN 1923-8428 [Online] www.sanada.net www.sanada.org Study on Rural Mirofinane System s Defets
More informationc 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
More informationPrices, Social Accounts and Economic Models
Paper prepared for the 10th Global Eonomi Analysis Conferene, "Assessing the Foundations of Global Eonomi Analysis", Purdue University, Indiana, USA, June 2007 Pries, Soial Aounts and Eonomi Models Sott
More informationThe Impact of Capacity Costs on Bidding Strategies in Procurement Auctions
Review of Aounting Studies, 4, 5 13 (1999) 1999 Kluwer Aademi Publishers, Boston. Manufatured in The Netherlands. The Impat of Capaity Costs on Bidding Strategies in Prourement Autions JÖRG BUDDE University
More informationManaging Future Oil Revenues in Ghana
IFPRI Disussion Paper 00893 August 2009 Managing Future Oil Revenues in Ghana An Assessment of Alternative Alloation Options Clemens Breisinger Xinshen Diao Rainer Shweikert Manfred Wiebelt Development
More informationToo Much Skin-in-the-Game? The Effect of Mortgage Market Concentration on Credit and House Prices
Too Muh Skin-in-the-Game? The Effet of Mortgage Market Conentration on Credit and House Pries Deeksha Gupta January 3, 018 Link to Latest Version Abstrat During the housing boom, mortgage markets beame
More informationGrowth, Income Distribution and Public Debt
Growth, Inome Distribution and Publi Debt A Post Keynesian Approah João Basilio Pereima Neto José Luis Oreiro Abstrat: The objetive of this paper is to evaluate the long-run impat of hanges in fisal poliy
More informationOn the Welfare Benefits of an International Currency
On the Welfare Benefits of an International Curreny Prakash Kannan Researh Department International Monetary Fund Otober 2006 Abstrat Is it benefiial for a ountry s urreny to be used internationally? And,
More informationHistorical Cost Accual cash outlay when the produce was purchased. Use mainly for tax purposes and SEC filings.
Historia Cost Aua ash outay hen the produe as purhased. Use mainy for tax purposes and SEC fiings. Current Costs Amount that oud be paid under prevaiing market onditions. Repaement ost The amount it takes
More informationi e SD No.2015/0206 PAYMENT SERVICES REGULATIONS 2015
i e SD No.2015/0206 PAYMENT SERVICES REGULATIONS 2015 Payment Servies Regulations 2015 Index PAYMENT SERVICES REGULATIONS 2015 Index Regulation Page PART 1 INTRODUCTION 7 1 Title... 7 2 Commenement...
More informationValue Added Tax (Flat-rate Valuation of Supplies of Fuel for Private Use) Order 2013
Index VALUE ADDED TAX (FLAT-RATE VALUATION OF SUPPLIES OF FUEL FOR PRIVATE USE) ORDER 2013 Index Artile Page 1 Title... 3 2 Commenement... 3 3 Flat-rate basis of valuation of supplies of fuel for private
More informationOptimal Monetary Policy in a Model of the Credit Channel
Optimal Monetary Poliy in a Model of the Credit Channel Fiorella De Fiore y European Central Bank Oreste Tristani z European Central Bank 9 September 2008 First draft Abstrat We onsider a simple extension
More information(Note: Please label your diagram clearly.) Answer: Denote by Q p and Q m the quantity of pizzas and movies respectively.
1. Suppose the consumer has a utility function U(Q x, Q y ) = Q x Q y, where Q x and Q y are the quantity of good x and quantity of good y respectively. Assume his income is I and the prices of the two
More informationAppendix: Indifference Curves
Appendix: Indifference Curves Chapter APPENDIX CHECKLIST The appendix uses indifference curves and budget lines to derive a demand curve. Indifference curves An indifference curve is a line that shows
More informationCounty of San Diego Participation Agreement for 457(b) Deferred Compensation Plan
County of San Diego Partiipation Agreement for 457(b) Deferred Compensation Plan DC-4769 (07/16) For help, please all 1-888-DC4-LIFE www.mydcplan.om 1 Things to Remember Complete all of the setions on
More informationLimiting Limited Liability
Limiting Limited Liability Giuseppe Dari-Mattiai Amsterdam Center for Law & Eonomis Working Paper No. 2005-05 This paper an be downloaded without harge from the Soial Siene Researh Network Eletroni Paper
More informationIntroduction to Microeconomics AP/ECON C Test #2 (c)
YORK UNIVERSITY FACULTY OF LIBERAL ARTS AND PROFESSIONAL STUDIES Introduction to Microeconomics AP/ECON 1000.03C Test #2 (c) Course Director: Ida Ferrara November 13 th, 2009 Name Student Number Instructions:
More informationExogenous Information, Endogenous Information and Optimal Monetary Policy
Exogenous Information, Endogenous Information and Optimal Monetary Poliy Luigi Paiello Einaudi Institute for Eonomis and Finane Mirko Wiederholt Northwestern University January 2011 Abstrat This paper
More informationEstimating Fundamental Value and the Size of Rational Speculative Bubbles of Hong Kong Stock Market during the Year 2008
International Journal of Finanial Eonomis Vol. 4, No., 205, -7 Estimating Fundamental Value and the Size of Rational Speulative Bubbles of Hong Kong Stok Market during the Year 2008 Devendran Indiran,
More informationProblems. the net marginal product of capital, MP'
Problems 1. There are two effects of an increase in the depreciation rate. First, there is the direct effect, which implies that, given the marginal product of capital in period two, MP, the net marginal
More informationVariable Markups and Misallocation in Chinese Manufacturing and Services
Variable Markups and Misalloation in Chinese Manufaturing and Servies Jinfeng Ge Zheng Mihael Song Yangzhou Yuan eember 13, 216 Abstrat Cross-ountry omparison reveals an unusually small servie setor in
More informationGlobalization, Jobs, and Welfare: The Roles of Social Protection and Redistribution 1
Globalization, Jobs, and Welfare: The Roles of Soial Protetion and Redistribution Priya Ranjan University of California - Irvine pranjan@ui.edu Current Draft Deember, 04 Abstrat This paper studies the
More informationMulti-Firm Mergers with Leaders and Followers
Multi-irm Mergers with eaders and ollowers Gamal Atallah 1 University of Ottawa Deember 2011 Department of Eonomis, University of Ottawa, P.O. Box 450, STN. A, Ottawa, Ontario, Canada, 1 gatllah@uottawa.a,
More informationRecitation #7 Week 03/01/2009 to 03/07/2009. Chapter 10 The Rational Consumer
Recitation #7 Week 03/01/2009 to 03/07/2009 Chapter 10 The Rational Consumer Exercise 1. The following table provides information about Carolyn s total utility from reading articles about current events.
More informationTRANSPORT WELFARE BENEFITS IN THE PRESENCE OF AN INCOME EFFECT
TRANSPORT WELARE BENEITS IN THE PRESENCE O AN INCOME EECT James Laird Senior Researh ellow Institute for Transport Studies University of Leeds Leeds LS2 9JT J.J.Laird@its.leeds.a.u Tel: 01463 235156 ACKNOWLEDGEMENTS
More information제 4 장소비자행동이론. The Theory of Consumer Behavior
제 4 장소비자행동이론 The Theory of Consumer Behavior 소비자행동 Consumer Behavior Consumer Preferences 소비자선호 The goods and services consumers actually consume. Given the choice between 2 bundles of goods a consumer
More informationWe will make several assumptions about these preferences:
Lecture 5 Consumer Behavior PREFERENCES The Digital Economist In taking a closer at market behavior, we need to examine the underlying motivations and constraints affecting the consumer (or households).
More informationAlfons John Weersink. A thesis submitted in partial fulfillment of the requirements for the degree. Master of Science. Applied Economics.
OPTIMAL REPLACEMENT INTERVAL AND DEPRECIATION METHOD OF A COMBINE ON A REPRESENTATIVE DRYLAND GRAIN FARM IN NORTHCENTRAL MONTANA by Alfons John Weersink A thesis submitted in partial fulfillment of the
More information