In Household Demand and Household Labor Supply we showed how households decide what to spend their income on currently. Households can also choose to: Use present income to finance future spending (Save) Use future income to finance current spending (Borrow) We can also use present income to enhance future production possibilities (investing) Borrowing Most people cannot finance large purchases …
Household Labor Supply
Most people earn an income as compensation for labor. Households must decide: Whether to work How much to work The type of work These decisions are affected by conditions in the labor market. The budget constraint and opportunity set is determined by: Availability of jobs Market wage rates Skills they possess The final choice depends …
Making it Work 