Lecture 20, Wednesday, Oct. 28 1. At the course web site, I have posted some practice questions about consumer theory. I recommend taking a look at this. Lecture 1. Consumer choice Change in income 2. Consumer choice Change in price 3. Public Goods .
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What are we doing here? Constructing Demand Curves Demand for pizza depends upon? Own price (here $4) price of other stuff (here price of beer= $2) Income (here $24) Preferences (Here Goldy) Put this together, get point A Quantity demanded = 3 Pizza (and 6 beers) Point where: (1) On budget constraint and (2) MRS = Ppizza/Pbeer012345678910111213141516171819200 1 2 3 4 5 6 7 8 9 1011121314BeerU=2U=3A