ECON 231 Lecture Notes - Factors Of Production, Efficient-Market Hypothesis, Normal Good

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22 Nov 2012
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Swf- f(consumption, health, freedoms, leisure, environmental quality, education etc) Rate consumption= g ($ value market goods and services non market goods and services) Money and cash doesn"t determine welfare, how it is spent determines welfare (not p but the q). Key question= are other determinants normal or inferior. Kuznets curves for quality , freedoms and environment. How to measure income-> real income per capita. To remove the p"s we need a price index. Vary across time and space: change in price and composition. Q adjustment complete -> p growth minded. Sources of micro data -> public institutions, court records, church records, tax records. Unambiguously welfare improvement: increase in income due to increased productivity. 1 and 2 are usually together, but very rare to see if not impossible for all 3 to be together. Total factor product activity will show us this. Q=f(a,l,k,m: k is machine hours, m is other things (raw materials and intermediate goods, hard to measure)