101-2010-L6

101-2010-L6 - Econ101 Lecture 6 Consumption and Leisure...

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    Econ 101 Lecture 6 Consumption and Leisure Decisions
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    From measuring to modeling It’s time to construct models of the economy and  use them as  laboratories  to understand and predict  macroeconomic events
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    From measuring to modelling It’s time to construct models of the  economy and use them as  laboratories   to understand and predict  macroeconomic events e.g. what happens if Government implements a stimulus package Government changes taxes Productivity changes
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    Where are we? Measurement of Economic Activities A static model of the economy Economic Growth A dynamic model of the economy Business Cycles
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    Consumption, work and  leisure Macroeconomic events are the result of  decisions made at the individual level  ( microfoundations ) Whether and how much to work is one  of the most important economic  decisions an individual makes GDP is zero unless someone is willing  to work
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    Consumption, work and leisure Average annual hours worked, per worker (USA)
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    Consumption, work and leisure Average annual hours worked, per worker
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    Consumption, work and leisure
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    Consumption, work and  leisure Why is this important? Need to work if you want to buy consumption  goods Would rather not work and enjoy leisure We call this a  trade-off : while people desire 
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101-2010-L6 - Econ101 Lecture 6 Consumption and Leisure...

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