ECN114

Lecture 1

G. Renshaw’s ch.3

Linear Equations

• simultaneous linear equations

• economic applications
• comparative statics
• inverse functions
• macroeconomic model

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Economic Application

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Economic Application

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Comparative Statics

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Comparative Statics

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Inverse functions
qS = 12p – 200

p = (1/12) qS + 16(2/3)

qS = 12p – 200 – 600 

p = (1/12) qS + 16(2/3) + 50

qD = – 8p + 2000

p = – (1/8) qD + 250 

Dependent & Independent variables
qS, qD : dependent
p : independent
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Inverse functions

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Inverse functions

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Inverse functions

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Inverse functions

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Macroeconomic application

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Macroeconomic application

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G. Renshaw ch.3
Study: 3.13-3.17 bare minimum, &
Attempt: all progress exercises

for next week’s class/seminar practice

progress exercises 3.4.4, 3.4.5 & 3.4.6

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