Microeconomics I partie 6/9
Fiches de révisions
Fiches de révisions
Set of flashcards Details
| Flashcards | 39 |
|---|---|
| Language | English |
| Category | Macro-Economics |
| Level | University |
| Created / Updated | 06.06.2019 / 02.10.2023 |
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Maximise profit subject to output constraint/technology
Cross price elasticity
Income elasticity
Elasticity and marginal revenue
Constant elasticity demand
Elasticity and total revenue graph
Elasticity and total revenue
Elasticity of a linear demand curve
Elasticity's formula
The extensive and intensive margin
Equivalence of CV and EV in quasi-linear preferences
Equivalent variation graph
Compensating variation graph
Equivalent and compensating variations' definitions
Comparative statics of intertemporal choice
Future value
Budget constraint for present and future consumption
Assume that leisure is a normal good. How does labour supply change when w augments?
Labour supply starting with an endowment
Assumptions/notation:
I Nonlabour income
I Amount of consumption, price of consumption
I Amount of labour supplied, wage rate
Budget constraint
Further notation:
I Maximum amount of labour time
I Maximum consumption without work
I Leisure time
Budget constraint becomes
With endowment: budget constraint, gross demand, net demand
Slutsky equation with calculus 2/2
Slutsky equation with calculus 1/2
Hicks substitution effect
change in demand when prices
change but a consumer’s utility is held constant (consumer is indifferent between the original bundle and the one he can now afford) ! roll the budget line around the indifference curve
Slutsky equation: an example: substitution and income effect
Slutsky equation, an example: Now suppose p1 diminishes to 2. New demand?
16
Slutsky equation: an example
Assume the demand function is: x1(p1;p2;m) = 10 + 1m/10p1
Initially m = 120 and p1 = 3
Initial demand?
14
Change with endowment income effect
Slutsky equation
Quasilinear preferences
only substitution effect
Perfect substitutes: 3 scenari for change in demand
Slutsky decomposition: perfect complements
Subsitution effect = 0
Price effect and income effect with change in price: giffen good
Price effect and income effect with change in price: normal good
Discrete goods
Perfect complements: price offer curve and demand curve
