Chapter 5: Model Flashcards
1
Q
When is the market in competitive equilibrium?
A
When Supply of labour = Demand for labour
2
Q
Determinants of Supply
A
Taxes
Dividends
3
Q
Determinants of consumer BC
A
wages
Taxes
Dividends
4
Q
Firm’s maximized profit equation
A
Profit (pi) = Y - wNd
5
Q
Slope of production function
A
MPn
6
Q
Production Function characters
A
Output Y
Labour input N
7
Q
Marginal Rate of Transformation
MRTS = ?
A
The rate at which leisure can be converted into consumption
MRTS = MPn
8
Q
Competitive Equilibrium
A
MRS = MRT = MPn l,c
