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Lecture%2010%20February%2023

Lecture%2010%20February%2023 - Todays agenda The rational...

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Today’s agenda The rational consumer’s choices Budget lines and budget sets Preferences and utility Reminder: If your name is listed at the end of any lecture, you must show your Rutgers ID to a teaching assistant before leaving the room .
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Where we’ve been and where we’re headed... First phase of the course: Gains from trade Introduction to supply and demand Brief look at efficiency of markets and potential for market failure Second phase: Behind the demand and supply curves Relate them to optimizing behavior by consumers and firms in an equilibrium model Explain the negative slope of demand curves Explain the positive slope of supply curves
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Goals of the next two classes Explain the “Law of Demand” the inverse relationship between P and Q D Focus on demand of single consumer If individuals’ demands slope downward, so too does market demand, as we saw in Lecture 3 Introduce utility and indifference curves geometric ways to describe preferences useful here and later in welfare economics
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