Deck 5 - Econ 301 Microeconomics L lick to edit Master...

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Click to edit Master subtitle style 5/11/11 Lecture 5. Consumer Choices Professor Mian Dai Spring, 2011 Econ 301 Microeconomics
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5/11/11 A road map for today’s lecture Budget Constraints Consumer’s Optimal Choice Interior solution Corner solution Application: Food stamp vs. cash rebate
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5/11/11 Recap: indifference curves and ( a ) 3 0 2 5 1 5 M , Movies per semester 2 5 2 0 1 5 1 0 5 d a b e c f A B 3 0 1 5 M , Movies per semester 2 5 2 0 1 5 1 0 d a b I 1 e c f G, G a m es p er se es te r
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5/11/11 Budget Constraint Opportunity set L 1 ( p M = $10, I= $500) 2 0 1 0 1 0 0 3 0 M , Movies per semester a b c d G, G a m es p er se es te r Mike can buy any bundle as long as the cost is less than budget, i.e. PMM+ PG G≤ I. If Mike have $500 allowance to spend on movie and games, PM=$10, and PG=$20, any point in the Budget constraint defines the set of product a consumer can purchase with limited income. M P I / 50 = G P I / 25 =
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What happens to the
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This note was uploaded on 05/11/2011 for the course ECON 301 taught by Professor Sheng during the Spring '11 term at ITT Tech Pittsburgh.

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Deck 5 - Econ 301 Microeconomics L lick to edit Master...

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