'Indifference curve' presentation slideshows

Lecture 5: Arrow-Debreu Economy. The following topics are covered: Arrow-Debreu securities Pricing Arrow-Debreu securities Optimal portfolios of Arrow Debreu securities How Arrow-Debreu securities differ framework differs from the standard utility maximization? Implications in asset pricing

Indifference Curves. An indifference curve shows a set of consumption bundles among which the individual is indifferent. Quantity of Y. Combinations (X 1 , Y 1 ) and (X 2 , Y 2 ) provide the same level of utility. Y 1. Y 2. U 1. Quantity of X. X 1. X 2. Marginal Rate of Substitution.

18.1 OPTIMAL CONTRACT DESIGNED FOR A SINGAL PARTY. Profit –maximizing insurance contract with adverse selection ; Imagine a profit maximizing risk – neutral insurance company with monopoly power. An individual which has uncertain amount of money to spend.

Chapter 7. Consumer Behavior . Chapter Objectives. Total utility and marginal utility Law of diminishing marginal utility Marginal utility-to-price ratios Deriving the demand curve Income and substitution effects Appendix: the indifference curve model. 7- 2. Utility.

Demand and Consumer Theory. International Managerial Economics. Introduction. Obviously important for managers to know demand for product Analysis can be difficult –price, income tastes etc… Endogenous and exogenous variables If changes prices needs to know what impact will be: elasticity

Consumers’ preferences. ECO61 Udayan Roy Fall 2008. Goods bundles. Origin. Preferences . Consumers have preferences that they can use to compare different goods bundles The preferences may be over goods bundles consumed by oneself or over goods bundles consumed by someone else

Demand & Utility. What is Utility?. Satisfaction, happiness, benefit. Cardinal Utility vs. Ordinal Utility. Cardinal Utility : Assigning numerical values to the amount of satisfaction

Tastes / Preferences. Indifference Curves. Rationality in Economics. Rationality Behavioral Postulate : “Rational Economic Man ” The decision-maker chooses the most preferred bundle from the set of available bundles. We must model: Set of available bundles; and

3. Demand and Behavior in Markets. assume for now that perfectly competitive markets are given. How they arose will be discussed in part 4. properties of perf. comp. markets: any agent can exchange as much of any good as desired at a fixed given price

International Trade Models. ECN 3860 International Economics. Why Nations Trade. International trade provides us with a variety of goods and services from other countries; International trade promotes specialization and efficiency in production; and

Chapter 8 . Slutsky Equation. How the optimum moves when the price of a good changes?. Decomposition : the total effect = the substitution effect + the income effect . p139 . The pivot gives the substitution effect , the shift gives

Chapter 4 homework. Questions 6, 8, and 16. Managerial Economics & Business Strategy. Chapter 4 The Theory of Individual Behavior. Normal Good. Income effect (+) Substitution effect (+) Total effect (+) How Draw??. Clothing. A. C. B. Substitution Effect. Food. Income Effect.

Theory of Consumer Behavior. Chapter 3. Topics of Discussion. Utility Theory Total Utility (Satisfaction) Marginal Utility Meet Carl or Carla Consumer Law of Diminishing Marginal Utility. Indifference Curves Concept of Isoutility Marginal Rate of Substitution.

Chapter 6. Production. Introduction. Production decisions of a firm are similar to consumer decisions Can also be broken down into three steps: Production Technology Describe how inputs can be transformed into outputs Inputs: land, labor, capital and raw materials

Chapter 3 Consumer Behaviour I --- The Indifference Curve Approach. Contents:. Postulates of Consumer Behaviour Good, Bad and Neuter Utility Indifference Curve Properties of Indifference Curves of Two Goods Other Shapes of Indifference Curves Budget Line Consumer Equilibrium.

8. CHAPTER. Possibilities, Preferences, and Choices. After studying this chapter you will be able to. Describe a household’s budget line and show how it changes when prices or income change

The Family as an Economic Unit. The Neoclassical Model of Specialization & Exchange. Basic underlying assumption: The family is a unit whose adult members make informed and rational decisions that maximize the well-being of the family.

CHAPTER 3. TOOLS OF NORMATIVE ANALYSIS. Welfare Economics. Criteria for Evaluating Government Policy Welfare Economics – branch of economic theory concerned with the social desirability of alternative economic states. . Welfare Economics.

Intermediate Microeconomics. Utility Theory. Utility. A complete set of indifference curves tells us everything we need to know about any individual’s preferences over any set of bundles. However, our goal is to build a model that is useful for describing behavior.

Family Utility Maximization. The goal of the family is to maximize utility by choosing a combination of home work and market work. Household production. You can cook and eat a steak at home or you can go out to eat a steak. The household production takes time to prepare.