Other
ECO3020F tutorial 9
- Course
- Institution
Tut questions and memo
[Show more]
Seller
Follow
hslisa001
Content preview
firm's aim maximise profits MCand MBmeasured in terms of
PV of profits
invest until MC MB
investing in 1 unit of
Marginal cost what the firm gives up by
capital in current periodof
an extra unit of investment
marginal benefit benefits to the PV of profits
in the current period added
for future profit
MCCI I one unit of current profitgivenup
MB MPK 1 d Itr
MC MB I MPK 1 d Itr
rule
MPK d r firm's optimal investment
of
real rate interest
future MPK net of depreciation
r opportunity cost
of investment to the firm
the firm needs to invest MPK r The opportunity cost
that could be earned
of investing in capital is the rate
from lending in credit market optimal investment
schedule down ward sloping how much investment is
of future capital
required for net marginal product
real interest rate
, note
K
2
K
N skiter keo
j
i
N current unemployment
a
y.im ntoafpat
b
in current callital stock MPL labourdeman
NY to NE N
left shift of output supply curve y Lo y
in current tarpital stock MPK I right shift
of output demand curve 4949 to
Goods market equilibrium Pr and Y outputsupply
effects output demand effects leisure
NS to Ns
r labour supply N
w and
labour market equilibrium
overall effect Y and C
I ambiguous should
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller hslisa001. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $4.53. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
67474 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now