econ303reviewq2spring2010 (1)

econ303reviewq2spring2010 (1) - Slope of IC=MRS=MUx/MUy...

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Econ 303 quiz 2 review topics Harmless cash outflows caused by trade deficits Real bills view of inflation versus the quantity theory view Outflows—harmless kind resulting from a trade deficit, and the bad kind, caused by a bank run Effects of maintaining convertibility, suspending, and devaluing Subsidies: show DWL and government expense using supply and demand curves Utility functions Indifference curves and budget constraints. 4 properties of indifference curves: neg slope, convex, don’t cross, and one thru every point Goods, bads, neuters—shapes of IC’s; also shapes for complements and substitutes.
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Unformatted text preview: Slope of IC=MRS=MUx/MUy Slope of BC=Px/Py Equation of BC: PxX+PyY=I Finding an optimum mathematically: when MRS is given; when only utility function is given In our first class meeting next week I expect to talk about: Lagrangian method of finding an optimum The income expansion path and the engel curve The price expansion path and the demand curve Why rationing lowers utility Why a cash gift is preferred to a subsidy Why an income tax is preferred to a sales tax These topics, if covered in class, can also appear on the quiz....
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This note was uploaded on 02/21/2010 for the course ECON 332 taught by Professor Jeong during the Spring '10 term at USC.

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