Menu_07_Oct_10 - ii. Income effect d. Other goods i....

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TODAY’S MENU: Thursday 07 October 2010 I. BUSINESS A. Practice Problems 1. Chapter 10: 1, 2, 4-8, 14 2. Chapter 10 Appendix: ALL 3. Chapter 11: 2-10, 14-16 B. Second Exam: One week from today II. SUBSTANCE A. Consumption decisions, economist style 1. Consumer choice: maximizing behavior a. Ordinary goods – more is better than less. Marginal utility >0 i. Tangency condition b. Budget change c. Price change i. Substitution effect: willingness cheaper we will buy more
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Unformatted text preview: ii. Income effect d. Other goods i. Perfect substitutes ii. Perfect complements: goods that are consumed in a constant ratio iii. Neutral: MU=0 iv. Bad: MU<0 v. Normal vi. Inferior vii. Giffen B. Strategic interaction, economist style: Game Theory 1. Basics a. Payoff matrix b. Nash equilibrium c. Dominant strategy equilibrium 2. Examples III. NEXT TIME A. Finish Chapter 11: “Game Theory…”...
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This note was uploaded on 01/16/2012 for the course ECON 2010 taught by Professor Roussel during the Spring '08 term at LSU.

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