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
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 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
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 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
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 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)
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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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