Bài giảng MicroEconomics - Chapter 14 Rent, Interest, and Profit

Rent, Interest, and ProfitMcGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.Economic RentPrice paid for land and other natural resources Perfectly inelasticity supplyChanges in demandA surplus paymentLO114-2Economic RentAcres of LandLand Rent (Dollars)L0D1D2D3D4SR1R2R30abLO114-3Economic RentLand ownership: fairness vs. allocative efficiencyApplication: a single tax on landHenry George’s proposalSingle tax movementCriticismsLO114-4InterestPrice paid for use of moneyStated as a percentageMoney is not a resourceInterest rates and interest incomeRange of interest ratesRiskMaturityLoan sizeTaxabilityLO214-5Loanable Funds TheoryExtending the modelFinancial institutionsChanges in supplyHousehold thriftChanges in demandRate of return on investmentOther participantsLO214-6Loanable Funds TheoryQuantity of Loanable FundsInterest Rate (Percent)0DSi =8%F0The equilibrium interest rateLO214-7Time-Value of MoneyMoney is more valuable the sooner it is obtainedAbility to earn interestCompound interestFuture valuePresent valueLO314-8Role of Interest RatesRelationship to:Total outputAllocation of capitalR&D spendingNominal and real ratesApplication: Usury lawsNonmarket rationingGainers and losersInefficiencyLO314-9Economic ProfitExplicit costsImplicit costsPure profitTotal revenue less explicit and implicit costsRole of the entrepreneurNormal profitLO414-10Economic ProfitInsurable risksUninsurable risksChanges in economic environmentStructure of economyGovernment policyNew products of production methodsLO414-11Economic ProfitProfit is compensation for bearing uninsurable risksSources of economic profitCreate new productsReduce production costsCreate and maintain a profitable monopolyLO414-12Economic ProfitProfit rations entrepreneurshipProfit aids in resource allocationProfit and corporate stockholdersLO414-13Income SharesLO514-14