The Theory of Consumer Choice The theory of consumer choice addresses the following questions: – Do all demand curves slope downward? – How do wages affect labor supply? – How do interest rates affect household saving?
Differences in Earningsin the U.S. Today The typical physician earns about $200,000a year. The typical police officer earns about$50,000 a year. The typical farm worker earns about$20,000 a year
Types of Imperfectly Competitive Markets Monopolistic Competition – Many firms selling products that are similar but not identical. Oligopoly – Only a few sellers, each offering a similar or identical product to the others
“In this world nothing is certain but death and taxes.” . . . Benjamin Franklin 0 20 40 60 80 100 1789 Taxes paid in Ben Franklin’s time accounted for 5 percent of the average American’s income
