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ECON10A_7

# ECON10A_7 - Midterm 1 Fri Oct 14 Last name A-L Chem 1179...

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1/4/2008 1 Announcements for Exam Week Midterm 1: Fri Oct. 14 Last name A-L: Chem 1179 Last name M-Z: Buch 1910 Bring ID to exam

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1/4/2008 2 No Clicker (as of Yesterday) 3231958 3513272 3561248 3761293 3866746 3955804 4001095 4115226 4177143 4201521 4214177 4251971 4276655 4381984 4443909 4482071 4581542 5094420 5125489 5162755 5405865 8727885
1/4/2008 3 Review For Midterm 1

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1/4/2008 4 Preferences Defined over bundles: (x 1 , x 2 ) (x 1 , x 2 ) Plot in coordinate system Monotonicity Indifference curves Marginal rate of substitution Slope of indif curve at a given bundle X 1 X 2
1/4/2008 5 Utility U(x 1 ,x 2 ) “Represents” preferences Attaches a number to a bundle Indif curves are level curves of U(x 1 ,x 2 ) U(x 1 ,x 2 ) not a unique representation. Increasing transformations of U(x 1 ,x 2 ) represent same preferences It’s like renumbering indif curves X 1 X 2 U(x 1 ,x 2 )=1 U(x 1 ,x 2 )=52 U((x 1 ,x 2 ))=7

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1/4/2008 6 Marginal Utility MU 1 (x 1 ,x 2 )= : How much utility you get form one more unit of good 1. MU 2 (x 1 ,x 2 )= : How much utility you get form one more unit of good 2. Depends on how much you already have of both goods Also depends on form of utility function 1 2 1 x ) x , u(x 2 2 1 x ) x , u(x
1/4/2008 7 Utility and Marginal Rate of Substitution

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ECON10A_7 - Midterm 1 Fri Oct 14 Last name A-L Chem 1179...

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