ajaz_204_2009_lecture_7 - University of Toronto Department...

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University of Toronto Department of Economics ECO 204 2009 2010 Sayed Ajaz Hussain Lecture 7 1 Ajaz Hussain. Department of Economics. University of Toronto (St. George)
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Today ± Incentives Application ² Marketing ² Teenage sexual behavior ² Subsidized education ² Declining Birth Rates Ajaz Hussain. Department of Economics. University of Toronto (St. George) 2
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“Incentives” Economic agents react to incentives Some good reads: Freakonomics The Logic of Life Undercover Economist The Armchair Economist Why More Sex is Safer Sex Ajaz Hussain. Department of Economics. University of Toronto (St. George) 3
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The Surveyed Consumer Ajaz Hussain. Department of Economics. University of Toronto (St. George) 4 Q 2 Q 1 Y/P 2 Y/P 1 Consumer indicated she’s willing to give up good 2 Indifference curves touch x axis Model her making no purchase of Q 2 Is there any hope for sellers of good 2?
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Ajaz Hussain. Department of Economics. University of Toronto (St. George) 5 Cocaine Ecstasy Uniform Prices “Addiction” Cocaine Ecstasy Non Uniform Prices “Breaking Addiction” Assume it’s easier to treat addicts if they consume combination of drugs
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This note was uploaded on 05/02/2011 for the course ECO 204 taught by Professor Hussein during the Fall '08 term at University of Toronto- Toronto.

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ajaz_204_2009_lecture_7 - University of Toronto Department...

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