1. Supply Side Model = Production Function
Chapter 3 - Witte
Supply Side Model = Production Function
(constant returns to scale)
Factor Prices

2. Firms = Profit Maximizers
Chapter 3 - Witte
Firms = Profit Maximizers
Diminishing Marginal Returns, MPK, MPL

3. Real Economic Profit Euler’s Theorem Labor Productivity
Chapter 3 - Witte
Real Economic Profit
Euler’s Theorem
Labor Productivity

4. Cobb-Douglas Production Function
Chapter 3 - Witte
Cobb-Douglas Production Function

5. Demand Side Economics: Y = C + I + G + NX
Chapter 3 - Witte
Demand Side Economics: Y = C + I + G + NX
C = A + MPC(Y-T)
I = I(r)

6. Chapter 3 - Witte
G = G(?)
Budget Balance
Y =

7. Market for Loanable Funds
Chapter 3 - Witte
National Savings = S
Market for Loanable Funds