Lecture 9 - ECONOMICS 100A Professor Dan Acland Lecture 9...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
ECONOMICS 100A Professor Dan Acland 09/23/10 Lecture 9 ASUC Lecture Notes Online is the only authorized note-taking service at UC Berkeley. Do not share, copy, or illegally distribute (electronically or otherwise) these notes. Our student-run program depends on your individual subscription for its continued existence. These notes are copyrighted by the University of California and are for your personal use only. D O N O T C O P Y Sharing or copying these notes is illegal and could end note taking for this course. ICLICKER QUIZ ANNOUNCEMENTS 1. The Dean of the Undergrad Division asked me to announce that tomorrow is the deadline for adding all courses and the last day for dropping all non-EDD courses. Don’t ask me anything about that. If you have any questions about it, direct your questions to the Head-GSI, Juan Carlos. 2. The Dean also asked me to encourage you to go online and check your enrollment status for all your classes, so you can get all of that sorted out before the deadlines tomorrow. 3. Problem Set #2 is due next Tuesday at the beginning of lecture - Put a box around your answer or it may not get graded. It’s a very bad idea to frustrate the GSI grading your paper; if they have to hunt around for your answer, they will get irritated. - Put your official name, your SID #, your GSI’s name, and your section time on the top of your Problem Set LECTURE So, on the walk to lecture, a student in the class asked me, “Why are we skipping ahead so far?” My reply to him was, “Well, I would like to know why Nechyba put consumer theory so far off? There are different ways to approach this material. The answer to my question is because the main application that he is studying (which is true of most undergraduate classes) of expected utility theory is the market for insurance. The key word is “market”. What is interesting in Ch. 17 is to see what actually happens in a market for insurance, which means you need to have consumers and producers. So Nechyba has to put off all of this until he introduces producers in Ch. 11-13, consumer-producer relationship in Ch. 14, and a few other topics that we are actually going to skip. Then, he gets to the insurance market. I personally am more interested in frontloading all of the consumer theory so you get a package of all of the modeling tools to model the decisions of consumers. I’m dragging the future back into the present. What that means is that for the next reading, there will be a couple of things that come up that doesn’t really make sense to you regarding firms. One thing in particular, it will say “Remember that in a perfectly competitive market in the long run, all firms make zero profit.” We’re going to have a lot more opportunities to understand what that bizarre statement means. It’s perfectly obvious to anyone in this society that, even in a catastrophic downturn, most firms are making huge profits. We’re going to talk about what that means: it means they’re making zero above normal profit. We’ll talk about that later. For now, just take it for
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/06/2012 for the course ECON 100A taught by Professor Woroch during the Fall '08 term at Berkeley.

Page1 / 8

Lecture 9 - ECONOMICS 100A Professor Dan Acland Lecture 9...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online