Demand analysis II - SessionV:DemandanalysisII PGPI TermI...

Info icon This preview shows pages 1–16. Sign up to view the full content.

View Full Document Right Arrow Icon
Session V: Demand analysis II PGP I Term I
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Indifference curve in 3- dimensional space G 2 G 1 Ordinal utility level IC5=U5 IC4=U4 IC3=U3 IC2=U2 IC1=U1
Image of page 2
Income-substitution effect Normal goods Substitution  effect A B C BL1 BL2 BL3 Income effect G1 G2
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Income-substitution effect Inferior goods Substitution  effect A B C BL1 BL2 BL3 Income effect G1 G2
Image of page 4
Income-substitution effect Giffen goods Substitution  effect A B C BL1 BL2 BL3 Income effect G1 G2
Image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Percentage change in quantity demanded of a  good resulting from one percent change in its  price For a linear demand curve: Price elasticity of demand q p p q p p q q × = = / / ε 1 ; 2 If , 0 if ; 0 , 0 If = = -∞ = = = = - - = - = - = ε ε ε ε b a p q p bp a bp q bp bp a q
Image of page 6
Linear demand curve 2 4 4 8 q p | | = ε | | =-1 ε | | =0
Image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 8
Image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 10
Image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 12
Image of page 13

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 14
Image of page 15

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 16
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern