KEK/MI2PE - Microeconomics II (2022) (ENGLISH)

B.  The Theory of Choice.  This is the basic theory of how a consumer decides which

commodity bundle to buy, given prices, income, and the consumer's preferences

over commodities.

    i)  

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    ii)  .
    iii)  .  At 5:00 in this video, I refer to "superscripts," but they are

            actually subscripts.  At 5:21, I use the term "indifference curve" without telling you what

            an "indifference curve" is: an "indifference curve" is "a contour line of the utility function."

    iv)  

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    v)  .
    vi)  .
    vii)  .
    viii)  .

    ix)  

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    x)  

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    xi)  .

    xii)  

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    xiii)  

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    xiv)  

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    xv)  .

C.  Changes in Income and Prices.  This shows how the decisions described in

Topic B change when a consumer's income changes or when the prices which

the consumer has to pay change.  One result is how to draw demand curves.

    i)  

    ii)  
    iii)  
    iv)  

    v)  

    vi)  

    vii)  

    viii)  

    ix)  

.  The final example, concerning laboratory rats, is explained in a three-

            page-long PDF file here.  (Ignore the fact that its pages have blank spaces in odd places.)

    x)  

 

D.  Market Demand and Elasticity.  Adding the demand curve of different individuals to

obtain the market demand curve; and different ways of describing how sensitive

demand curves are to changes in income and in prices.

    i)  

    ii)  
    iii)  
    iv)  
    v)  
    vi)