文档介绍：Intermediate Macroeconomics
Lecture 18
Investment
Business fixed investment
Equipment and structures that businesses buy to use in production
Residential investment
New housing that people buy to live in and that landlords buy to rent out
Inventory investment
Goods that business put aside in storage, including materials and supplies, work in process, and finished goods
Investment
Business Fixed Investment
Neoclassical model of investment
I, MPK, i-rate, tax rules
Production firms & rental firms
Business Fixed Investment
The rental price of K (production firms)
MC=MB
MB: how many products 1 unit K generates --- MPK
MC: how many products 1 unit K costs --- (R/P)
MPK=R/P
Business Fixed Investment
Assumption: MPK↓ as K ↑
R/P
K
K supply
MPK
Business Fixed Investment
Cobb-Douglas production function
Business Fixed Investment
The cost of K (rental firms)
You purchased a car for RMB150,000 and start up your car-rental business. 1 yr later, the same car is sold at RMB100,000. The depreciation rate for the car in the 1st yr is 30%. The market i-rate is 2%.
What is the cost of your business this yr?
Business Fixed Investment
Interest cost ---
Change in P of K ---
Depreciation ---
Cost of K: