demand.6b

# demand.6b - Econ 100A: Demand, Part 2 (Chapter 6) Thomas G....

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Unformatted text preview: Econ 100A: Demand, Part 2 (Chapter 6) Thomas G. Koch Winter 2009 Thomas G. Koch Demand (6b) 1(39) Clickers Turn on your clicker Hit a button Thomas G. Koch Demand (6b) 2(39) A reminder Next time is first exam! Two parts Multiple Choice (15 points) Bring a Scantron!!!!! Short-answer (10 points) Thomas G. Koch Demand (6b) 3(39) Review Session Thomas G. Koch Demand (6b) 4(39) How we got here Developed an algorithm Given preferences (utility function) and a budget constraint Find the demand function for some good. We found x * 1 = x 1 ( p 1 , p 2 , m ) x * 2 = x 2 ( p 1 , p 2 , m ) Thomas G. Koch Demand (6b) 5(39) Last time We focused on demand response to income x * 1 m Normal vs. Inferior Today We focus on prices. Thomas G. Koch Demand (6b) 6(39) Own price x 1 ( p 1 , p 2 , m ) p 1 x 2 ( p 1 , p 2 , m ) p 2 Thomas G. Koch Demand (6b) 7(39) Ordinary Good Thomas G. Koch Demand (6b) 8(39) So always positive, right? Not so fast. We can draw it the other way. Thomas G. Koch Demand (6b) 9(39) A Giffen Good Thomas G. Koch Demand (6b) 10(39) What is going on?...
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## This note was uploaded on 09/12/2011 for the course ECON 100A taught by Professor Babcock during the Winter '07 term at UCSB.

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demand.6b - Econ 100A: Demand, Part 2 (Chapter 6) Thomas G....

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