.

LOG
11:36 AM 1/24/2012
in the mathematical model, quantity is a function of price, but in the original
economic model, price was a function of price. the reason for this difference is
that the original economic model was more short-term, and the mathematical mode
l takes into account the long-term.
Partial Equilibrium Analysis - hold everything else constant except one variable
General equilibrium analysis - takes into account more than one variable when di
scussing s/d equilibrium
when comparing two sets of equations, you can tell what kind of products are bei
ng juxtaposed by the slopes of the respective demand curves

things that affect the demand for US exports

-foreign income
-exchange rate
-price (in US)
-price of good in foreign country
11:47 AM 1/27/2012
when you're talking about simple graphs of linear equations in economics, then t
he slope refers to the marginal propensity to save, the y-intercept is autonomic
savings? and the x-intercept is the break-even point for family's
Budget Line
-graph of the two different goods/services that a family can buy with a given in
come
>>>downward slope, two real solutions
graphically, show what happens when the consumer budget decreases
solving a system of linear equations
-income estimation model
in the 4-sector model
>>>deltaC/deltaY = marginal propensity to consume
>>>deltaI/deltaY = marginal propensity to invest
*****in the equilibrium position, Y=C+I, because the aggregate demand must be eq
ual to the supply*****
when you're solving for Y in the 4-sector equation, you end up with a factor of
((1)/(1-MPC-MPI-MPG-MPX)) and this is the "multiplier effect"
money market
Md = Money transactions + speculative demand (if interest rates go so low, peopl
e will prefer to have cash on hand rather than outting their money into a bank o
r a oan or a bond

11:30 AM 2/7/2012
*******TWO DAYS OF DERIVATION REVIEW THAT I DIDN'T GO TO FOR OBVIOUS REASONS****
***

Applications of derivatives
- marginal cost fuctions can be obtained by taking the deriative of the total co
st function
11:30 AM 2/14/2012
optimizing profit functions
-mathematical way: when MC=MR
>>>if given the Tocal Cost and Total Revenue functions, just derive and set them
equal to one another
*****ALWAYS SUBTRACT MARGINAL COST FROM MARGINAL REVENUE*****
Partial differentiation
eg., investment is a function of the real interest rate and the income level of
society
when notating for a partial derivative, make sure to use the greek letter d, tha
t thing that we used in linguistics for th, when you're doing dx/dy
>>>differentiate with respect to the variable you're talking about, and keep the
functino of the other vairable the exact same
11:34 AM 2/17/2012
Application of Partial Differentiation
-Marginal Product
>>>
****remember ceterus paribus****
Elasticity-relative change in quantity demanded in the relative change in price
11:31 AM 2/28/2012
EXAM GOES UP TO CONSTRAINED OPTIMIIZATION
multivariable constrained optimization
take objection function
do lamba(constraint =0)
>>>always subtract variables from constant to get the zero function
derive
**once
**once
**once

to get three functions

wrt X
wrt Y
WRT lambda