Chapter 3 - Witte

1
Chapter 3 - Witte

• Supply Side Model Production Function
• (constant returns to scale)
• Factor Prices

2
Chapter 3 - Witte

• Firms Profit Maximizers
• Diminishing Marginal Returns, MPK, MPL

3
Chapter 3 - Witte

• Real Economic Profit
• Eulers Theorem
• Labor Productivity

4
Chapter 3 - Witte

• Cobb-Douglas Production Function

5
Chapter 3 - Witte

• Demand Side Economics Y C I G NX
• C A MPC(Y-T)
• I I(r)

6
Chapter 3 - Witte

• G G(?)
• Budget Balance
• Y

7
Chapter 3 - Witte

• National Savings S
• Market for Loanable Funds