E100LectureNotes9

# E100LectureNotes9 - Aggregation 1/4/2008 1 Individual vs....

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1/4/2008 1 Aggregation

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1/4/2008 2 Individual vs. Market Demand 7 15 X 1 P 1 Fred
1/4/2008 3 Market Demand: Question 1 X 1 P 1 7 15 7 20 Fred George X 1 P 1 What is Market Demand when P 1 =7?

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1/4/2008 4 Market Demand X 1 P 1 7 15 7 20 Fred George X 1 P 1 X 1 P 7 35 Market
1/4/2008 5 Market for Factors of Production Market for Finished Goods HOUSEHOLDS FIRMS DEMAND (for Goods \$ \$ \$ \$ SUPPLY (of Factors of Prod) CIRCULAR FLOW DIAGRAM

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1/4/2008 6 SUPPLY OF FACTORS OF  PRODUCTION Labor
1/4/2008 7 Question 1 A doctor earns \$150/hr. He wants to take off from work and go see a movie that will last 2 hours. The ticket costs \$8. How many dollars worth of other consumption must he give up to see the movie? A. None B. \$8 C. 158\$ D. 308\$ E. Can’t tell

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1/4/2008 8 Supply of Labor Every economic choice involves a trade-off Labor Supply: Trade-off is between consumption and leisure. For simplicity, we group all consumption together into a single category. We call this category “disposable income.” This means income for consumption. Trade-off is between leisure and income to be used for consumption. U(Le, I)
9 The Labor-Leisure Decision 1 week = 168 hours L a = hours labor/week L e = hours leisure/week L a + L e

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## This note was uploaded on 04/10/2008 for the course ECON 100A taught by Professor Babcock during the Spring '07 term at UCSB.

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E100LectureNotes9 - Aggregation 1/4/2008 1 Individual vs....

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