Chapter Thirty-One Production 生产
Chapter Thirty-One Production 生产
Exchange Economies(revisited) No production, only endowments, so no description of how resources are converted to consumables General equilibrium; all markets clear simultaneously 1st and 2nd Fundamental theorems of welfare Economics
Exchange Economies (revisited) No production, only endowments, so no description of how resources are converted to consumables. General equilibrium: all markets clear simultaneously. 1st and 2nd Fundamental Theorems of Welfare Economics
Now Add production Add input markets, output markets, describe firms'technologies, the distributions of firms'outputs and profits∴ That's not easy!
Now Add Production ... Add input markets, output markets, describe firms’ technologies, the distributions of firms’ outputs and profits … That’s not easy!
Contents A one-person economy Optimal outcome Competitive equilibrium Two welfare theorems Non-convex technologies TWo-people economy Production possibility frontier Comparative advantage Pareto efficient allocation Competitive equilibrium
Contents A one-person economy – Optimal outcome – Competitive equilibrium – Two welfare theorems – Non-convex technologies Two-people economy – Production possibility frontier – Comparative advantage – Pareto efficient allocation – Competitive equilibrium
Robinson Crusoe's economy One agent, RC Endowed with a fixed quantity of one resource 24 hours Use time for labor(production or leisure(consumption) Labor time =l leisure time 24-l What will rc choose?
Robinson Crusoe’s Economy One agent, RC. Endowed with a fixed quantity of one resource -- 24 hours. Use time for labor (production) or leisure (consumption). Labor time = L. Leisure time = 24 - L. What will RC choose?
Robinson Crusoes Technology Technology: Labor produces output (coconuts)according to a concave production function
Robinson Crusoe’s Technology Technology: Labor produces output (coconuts) according to a concave production function
Robinson Crusoes Technology oconu Its Production function 0 24 Labor(hours)
Robinson Crusoe’s Technology Production function Labor (hours) Coconuts 0 24
Robinson Crusoes Technology oconu Its Production function Feasible production plans 0 24 Labor(hours)
Robinson Crusoe’s Technology Labor (hours) Coconuts Production function 0 24 Feasible production plans
Robinson crusoe's preferences RC's preferences coconut is a good -leisure is a good
Robinson Crusoe’s Preferences RC’s preferences: – coconut is a good – leisure is a good
Robinson crusoe's preferences oconu Its More preferred 0 24 Leisure (hours)
Robinson Crusoe’s Preferences Leisure (hours) Coconuts More preferred 0 24
