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E251.F11.W04.2.Ch4.Clsnts

E251.F11.W04.2.Ch4.Clsnts - valued users 8 Analyzed market...

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ECON 251 Fall 2011.Week 04.2: Classnotes September 14-15, 2011 (Chapter 4) 1.Consumer Choice: Indifference Curve Analysis (Cont.) A. Alternative Model of Consumer Choice : 1. Derived the income expansion path for normal and inferior goods* See Text 2. Derived the price consumption path for changes in the price of X 3. Derived the demand curve for x from the indifference curve mapping* See Text 4. Analyzed how to identify the income and substitution affects of a change in the price of X 5. Analyzed the Food stamp subsidy. 6. Derived Market Demand from individual demands of buyers 7. Analyzed the allocative function of Price: Price Allocates goods to the highest
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Unformatted text preview: valued users. 8. Analyzed market Efficiency ( MV = MC) 9. Derived consumer surplus value. (CSV = MV – Price) 10. Analyzed the increase in CSV resulting from a price decline. 11. Network effects – the extent to which an individual consumer’s demand for a good is influenced by other individuals’ purchases A. Bandwagon effect – a positive network effect B. Snob effect – a negative network effect 12. The Basics of Demand Estimation A. Experimentation B. Surveys C. Regression Analysis...
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