成果课件曼昆83.pptxVIP

?;Copyright 1997 Dead Economists Society;Why is the Classical Model Important?;neoclassical theory of distribution;The Classical Factory; We begin with firms and see what determines their level of production (and thus, the level of national e). Then, we examine how the markets for the factors of production distribute this e to households. Next, we consider how much of this e households consume and how much they save. We will also discuss the demand arising from investment and government purchases. Finally, we discuss how the demand and supply for goods and services are brought into balance. Let’s begin!;What determines the Total Production of Goods and Services?;L;The available production technology determines how much output is produced from given amounts of capital (K) and labor (L). The production function represents the transformation of inputs into outputs. A key assumption is that the production function has constant returns to scale, meaning that if we increase inputs by z, output will also increase by z. We write the production function as: Y = F ( K , L );Mankiw’s Bakery;We can now see that the factors of production and the production function together determine the quantity of goods and services supplied, which in turn equals the economy’s output. So,;;The price paid to any factor of production depends on the supply and demand for that factor’s services. Because we have assumed that the supply is fixed, the supply curve is vertical. The demand curve is downward sloping. The intersection of supply and demand determines the equilibrium factor price.;To make a product, the firm needs two factors of production, capital and labor. Let’s represent the firm’s technology by the usual production function: Y = F (K, L) The firm sells its output at price P, hires workers at a wage W, and rents capital at a rate R. ;;The Firms Demand for Factors;The Marginal Product of Labor;From the MPL to Labor Demand;Thus, the firm’s demand