# 西经高鸿业第三版lecture9

LECTURE9 生产要素价格决定的供给方面

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dU dU dY dU ? ? ?W ? dL dY dL dY

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dU 自用资源的边际效用： dl

dU dU W? ? dY dl

dU / dl ?W dU / dL

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Backward-Bending Supply of Labor
Wage (\$ per hour)
Income Effect > Substitution Effect

Supply of Labor

Income Effect < Substitution Effect

Hours of Work per Day

Substitution and Income Effects of a Wage Increase
Income (\$ per 480 day) Worker chooses point A: ?16 hours leisure, 8 hour work ?Income = \$80

w = \$20

Suppose wages increase to \$20

P 240
w = \$10 C A

Increase wage to \$20 worker chooses: 20 hour leisure, 4 hours work income = \$80

B

Q
0 8 12 16 20 24
Substitution effect Income effect

Hours of Leisure

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Labor Market Equilibrium
Wage

Competitive Output Market

Wage

Monopolistic Output Market SL = AE

SL = AE

vM

wC

A

wM

B
P * MPL

DL = MRPL

DL = MRPL

LC

Number of Workers

LM

Number of Workers

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Land Rent
Price (\$ per acre) Supply of Land

s2

s1

Economic Rent Economic Rent

D2 D1
Number of Acres

Quasi-rent
P

G

MC C
E B

AC AVC

Q0

Q

Economic Rent
Wage
The economic rent associated with the employment of labor is the excess of wages paid above the minimum amount needed to hire workers.

SL = AE A w*
Economic Rent

Total expenditure (wage) paid is 0w* x AL*

B

DL = MRPL
Economic rent is ABW*

0

L*

Number of Workers

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The intertemporal budget constraint
C2 C1 ? 1?r

Y2 ? Y1 ? 1?r

The intertemporal budget constraint
C2

The budget constraint (1 ? r )Y ?Y 1 2 shows all combinations of C1 and C2 that just Y2 exhaust the consumer’s resources.

C2 C1 ? 1?r

Y2 ? Y1 ? 1?r

Saving

Consump = income in both periods

Borrowing

Y1
Y1 ?Y2 (1 ? r )

C1

The intertemporal budget constraint
C2

The slope of the budget line equals -(1+r )
Y2

C2 C1 ? 1?r

Y2 ? Y1 ? 1?r

1

(1+r )

Y1

C1

Consumer preferences
C2
Marginal rate of substitution (MRS ): the amount of C2 consumer would be willing to substitute for one unit of C1. The slope of an indifference curve at any point equals the MRS at that point.

1

MRS

IC1

C1

Optimization
The optimal (C1,C2) is where the budget line just touches the highest indifference curve.

C2
At the optimal point, MRS = 1+r
O

C1

How C responds to changes in Y
Results: Provided they are both normal goods, C1 and C2 both increase,
C2

An increase in Y1 or Y2 shifts the budget line outward.

…regardless of whether the income increase occurs in period 1 or period 2.

C1

How C responds to changes in r
An increase in r pivots the budget line around the point (Y1,Y2 ).

C2

B

As depicted here, C1 falls and C2 rises. However, it could turn out differently…

A
Y2 Y1

C1

r
Ks

K

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r
r1
S1 S1

S0 S0

S2 S2

r0
r2
D
K1

K0

K2

K

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r MPK ? P
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Q ? L ? MPL ? K ? MPK

M L

A

B

A G? ,0 ? G ? 1 A? B

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