HS 3840B Study Guide - Comprehensive Final Exam Guide - Marginal Cost, Demand Curve, Pareto Efficiency

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Low minimum wage not worth it to work for people because they might have to pay child care for example. Change in min wage changes people"s decisions and businesses" decisions. You are constrained by your budget, you have a certain amount of money to spend on what you would like so you have to choose what will give you the most utility from what you can afford. Utility can also be explained as how happy something makes you. Utilit(cid:455) is (cid:271)asis of e(cid:272)o(cid:374)o(cid:373)i(cid:272)s (cid:271)ut it"s ha(cid:396)d to e(cid:454)p(cid:396)ess a(cid:374)d (cid:373)odel (cid:862)u(cid:863) is just so(cid:373)e fu(cid:374)(cid:272)tio(cid:374), (cid:449)ill (cid:271)e gi(cid:448)e(cid:374) to us i(cid:374) a (cid:395)uestio(cid:374) Just know that utility functions depend on x l and hs as arguments. Every individual is different we want to have reasonable assumptions to make about people"s behaviour and apply that broadly and then the tool becomes useful. Ca(cid:374)"t ask e(cid:448)e(cid:396)(cid:455) pe(cid:396)so(cid:374) i(cid:374)di(cid:448)iduall(cid:455) a(cid:271)out (cid:449)hi(cid:272)h optio(cid:374) the(cid:455) (cid:449)ould pi(cid:272)k.

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