ECON 1B03 Study Guide - Final Guide: Takers, Marginal Revenue, Demand Curve

• School: McMaster University
• Department: Economics
• Course: ECON 1B03
• Professor: Hannah Holmes

Document Summary

Present value: the formula for present value, pv, is, pv = x___ (1 + i) t where x = the amount you want to receive in period t i = the prevailing interest rate . Coupon payment: the annual payment is called a coupon payment, denoted c, the new pv formula is. Pv = c__ + c__ + + c+x__ (1 + i) (1 + i)2 (1 + i)t. The rental price: let r = rental price of capital. P = selling price of the good that capital produced . A irm will hire capital at the point where r = p*mpk. Vmpl = p*mpl: the vmpl (also known as marginal revenue product) is measured in dollars. Changes to labour demand: a change in w: Is a movement along the dl curve: shift factors, changes in p of goods: since d=vmpl=p*mpl. If p , dl + shift : changes in supply of other factors.