This preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentThis preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentThis preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentThis preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentThis preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: countries two industries • Factors will receive the same payments across industries. 5 Indifference Curves cannot cross 6 C Example • U=C*T; C=20, T=5; so C,T=20,5 • U=20*5 = 100 • Everywhere on this indifference curve, U=100 • Another point would be C,T = 4,25 and C,T=5,20 • What is the slope between C=4 and C=5? – If C=4 then T=25 and if C=5, T=20 • (2520)/(45) = 5/1 = 5 • Slope between C=19 and C=20? – At C=19, T = (100/19)=5.26 7 Budget Constraint (line) • P c C + P t T = M – M is income • Solve for T (vertical axis) • P t T= M  P c C • T = M/ P t  (P c /P t ) C • Slope – relative price of C! 8 Autarky: Constant Op. Cost 9 C Autarky: Increasing Op. Cost 10 C...
View
Full
Document
 Fall '06
 YAVAS,CEMILEPAN,LU
 Unemployment

Click to edit the document details