Chapter 8: Wealth and Substitution Effects in Labor and Capital Markets

Static Graphics

Each graphic opens in a new browser window.

Substitution and Wealth Effects - The Impact of an Increase in the Price of Gasoline

Substitution and Wealth Effects when Income is Derived Endogenously from Selling Gasoline

Substitution and Wealth Effects - Workers Choices in Labor Markets

Substitution and Wealth Effects in Leisure/Consumption Choices

Substitution and Wealth Effects - Taxes on Labor Income

Finding a Wage Tax Payment when observing after-tax Behavior

Substitution and Wealth Effects - 2 Different Wage Taxes

Tax Revenue can Rise (a) or Fall (b) with an Increase in Tax Rates

Substitution and Wealth Effects - Varied Interest Rates

The Impact of an Increase in Interest Rates on Savers

Substitution and Wealth Effects - Increase in Real Interest Rates

The Impact of an Increase in Interest Rates on Borrowers

"Neither a Borrower nor a Lender Be..."

From No Saving to Positive Saving when Interest Rates Rise

Substitution Effect - Cobb Douglas Utility Function - Increase in Price of Gasoline

Wealth and Substitution Effects for George Exxon: From Math Back to Graphs

Change in Wages - Consumption and Leisure

Wealth and Substitution Effects in Labor Choices: From Math Back to Graphs

The Laffer Curve - Tax Rates and Tax Revenues

The Role of Substitution Effects when Tastes are Quasilinear in Leisure