Chapter 02 - Lecture Outline

Chapter 02 - Lecture Outline - ChapterTwo ChapterTwo

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Chapter Two Chapter Two Labour Supply: Individual Attachment to the Labour  Labour Supply: Individual Attachment to the Labour  Market Market Chapter 2 1
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Labour Market Terminologies: Labour Force  and Labour Force Participation Rate LF (Labour Force) Individuals in the eligible population (15  years and older) who participate in labour  market activities, either employed or  unemployed LFPR The fraction of the eligible population that  participates in the labour force LFPR = LF/POP Chapter 2 2
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Unemployment To be considered unemployed, a  person must be in one of the following  three categories: 1. Without work but has made specific efforts  to find a job within the previous four weeks 2. Waiting to be called back to a job from  which he or she has been laid off 3. Waiting to start a new job within four weeks Chapter 2 3
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Chapter 2 4
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Chapter 2 5
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Chapter 2 6
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Basic Income–Leisure Model Underlying Foundation: The General Theory of  Consumer Behaviour Chapter 2 7
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The General Theory of Consumer Behaviour Consumption Possibilities (The Budget  Constraint/Line) Budget Equation Relative Prices and the Slope of the Budget  Line Consumer Preferences Indifference Curve Slope of the Indifference Curve and the  Marginal Rate of Substitution (MRS) Diminishing Marginal Rate of Substitution Chapter 2 8
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The General Theory of Consumer Behaviour Consumer Optimization (Utility  Maximization) Substitution and Income Effects Normal Goods Inferior Goods Chapter 2 9
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Basic Income–Leisure Model The choice of hours worked given  opportunities and value of non-market  time preferences and constraints individuals choose the feasible outcomes  which yield the highest level of satisfaction Chapter 2 10
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This note was uploaded on 09/12/2011 for the course RSM 392 taught by Professor Liu during the Spring '11 term at University of Toronto- Toronto.

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Chapter 02 - Lecture Outline - ChapterTwo ChapterTwo

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