The price of the final good
must then be equal to [p.
There are five types of agents in our model economy: 1) households, 2) employment agencies, 3) firms producing intermediate goods, 4) firms producing final goods
, and 5) the monetary authority.
Notice, A is external to final goods
producers, who only formulate demand for labour and intermediate inputs according to the following standard marginal revenue conditions:
where w and r are the wage rate and the interest rate in terms of the final goods
Noting that the absolute value of the price elasticity of demand for intermediate goods (by final goods
firms) is the same as the elasticity of substitution of intermediate goods, 1/(1 - [Rho]), and is thus increasing in [Rho], equation (6) shows that the markup is inversely related to that price elasticity.
In Francois, differentiated inputs are assembled into a final good
without using other primary factors.
The production of the final good
requires setting a value to N+1 parameters : [epsilon] and [[zeta].
12) In this model, outsourcing provides the supplier with better incentives, but integration gives the final good
producer better monitoring opportunities.
Given the fact that most forms of public investment, such as infrastructure or education spending, serve to increase productivity in both final goods
and human capital production simultaneously, total public capital expenditures are not decomposed into those that only affect output production and those that only affect human capital production.
9) The preferences of the individuals are given by the expected utility function, maximizing utility over their consumption of the final good
and their leisure time:
WHEN The Two Ronnies said their final good
night from me (and good night from him) in the early 1980s, they seemed to have kept their promise to call it a day.
We will be very sad not to be taking part in Thursday''s re-run, but my husband Mike and I would like to wish everybody left in the final good
luck, and safe running.