ECON10A_19

ECON10A_19 - AnnouncementsFinalExam Final will be in...

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1/4/2008 1 Announcements – Final Exam Final will be in IVTheatre 1, Mon. Dec. 5, 12-3. There will be assigned seating. Please bring your ID. Your seat number has been emailed to you. A diagram of IV Theater is downloadable form the class web page. Please sit in your assigned seat for today’s lecture. Prof Babcock's Friday O.H. will be in Chem 1179 On final, you will not have to draw complicated graph of equilibrium dynamics of competitive markets, but should understand underlying ideas.
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1/4/2008 2 STAGE   5 3 1 A 114 113 112 111 110 109 108 107 106 105 104 103 102 101 A 2 4 6   9 7 5 3 1 B 114 113 112 111 110 109 108 107 106 105 104 103 102 101 B 2 4 6 8 10 11 9 7 5 3 1 C 114 113 112 111 110 109 108 107 106 105 104 103 102 101 C 2 4 6 8 10 12 11 9 7 5 3 1 D 114 113 112 111 110 109 108 107 106 105 104 103 102 101 D 2 4 6 8 10 12 13 11 9 7 5 3 1 E 114 113 112 111 110 109 108 107 106 105 104 103 102 101 E 2 4 6 8 10 12 14 13 11 9 7 5 3 1 F 114 113 112 111 110 109 108 107 106 105 104 103 102 101 F 2 4 6 8 10 12 14 13 11 9 7 5 3 1 G 114 113 112 111 110 109 108 107 106 105 104 103 102 101 G 2 4 6 8 10 12 14 13 11 9 7 5 3 1 H 114 113 112 111 110 109 108 107 106 105 104 103 102 101 H 2 4 6 8 10 12 14 13 11 9 7 5 3 1 J 114 113 112 111 110 109 108 107 106 105 104 103 102 101 J 2 4 6 8 10 12 14 13 11 9 7 5 3 1 K 114 113 112 111 110 109 108 107 106 105 104 103 102 101 K 2 4 6 8 10 12 14 13 11 9 7 5 3 1 L 114 113 112 111 110 109 108 107 106 105 104 103 102 101 L 2 4 6 8 10 12 14 13 11 9 7 5 3 1 M 114 113 112 111 110 109 108 107 106 105 104 103 102 101 M 2 4 6 8 10 12 14 13 11 9 7 5 3 1 N 114 113 112 111 110 109 108 107 106 105 104 103 102 101 N 2 4 6 8 10 12 14 13 11 9 7 5 3 1 O 114 113 112 111 110 109 108 107 106 105 104 103 102 101 O 2 4 6 8 10 12 14 13 11 9 7 5 3 1 P 114 113 112 111 110 109 108 107 106 105 104 103 102 101 P 2 4 6 8 10 12 14 13 11 9 7 5 3 1 Q 114 113 112 111 110 109 108 107 106 105 104 103 102 101 Q 2 4 6 8 10 12 14 13 11 9 7 5 3 1 R 114 113 112 111 110 109 108 107 106 105 104 103 102 101 R 2 4 6 8 10 12 14   11 9 7 5 3 1 S 114 113 112 111 110 109 108 107 106 105 104 103 102 101 S 2 4 6 8 10 12   11 9 7 5 3 1 T 114 113 112 111 110 109 108 107 106   w heelchair T 2 4 6 8 10 12 13 11 9 7 5     U 114 113 112 111 110 109 108 107 106 105 access "pad" U 6 8 10 12 14
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Question Are you in your assigned seat? A. Yes B. No C. Not sure 1/4/2008 3
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1/4/2008 4 Demand for Factors of Production Recall: We solved profit max by finding Q max P*Q-LTC(Q,w,r) Q To get profit-maximizing L and K involved Three Steps First : Found LTC for every Q Second: Found optimal Q. Third: Plugged Q* into L*(Q, w, r) , K*(Q,w,r) But we could do this all in one step:
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1/4/2008 5 New Method Instead of max P*Q-LTC(Q,w,r) Q We could do M ax P*Q-wL-rK L, K F.O.C.s: P*MP L (L, K) = w (Value of Marginal Product of Labor = Wage) P*MP K (L, K) = r Two equations two unknowns. This gives us “ factor demand functions” L(P,w,r), K(P,w,r) Note: these are different from “output-constrained factor demand functions” L(Q,w,r), K(Q,w,r) L(Q,w,r), K(Q,w,r) give us cost-minimizing L,K for any Q. L(P,w,r), K(P,w,r) give us profit-minimizing L,K (i.e., at the optimal Q, given P) THIS WILL NOT BE ON THE EXAM
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1/4/2008 6 Market for Factors of Production DEMAND (for Factors of Prod) Market for Finished Goods & Services HOUSEHOLDS FIRMS DEMAND (for Goods & Services) $ $ $ $ SUPPLY (of Factors of Prod) SUPPLY (of Goods & Services) CIRCULAR FLOW DIAGRAM
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1/4/2008 7 Review of Previous Lecture
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1/4/2008 8 Summary A to B: Shift in demand causes new price P2. Quantity produced by firm cannot be adjusted in Very
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ECON10A_19 - AnnouncementsFinalExam Final will be in...

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