Lecture Notes 4

Lecture Notes 4 - DEMAND CURVE Total Value to the Consumer...

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Numeraire Equivalent Variation For Price increase Other good Old budget constraint New budget Indifference curve
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Numeraire Equivalent Variation For Price decrease Other good New price Old price Hence, real consumer income is nominal income plus consumer surplus
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Numeraire Equivalent & compensating variations for price decrease Other good New price Old price EV CV
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PRICE QUANTITY
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Unformatted text preview: DEMAND CURVE Total Value to the Consumer of Quantity Demanded price PRICE QUANTITY DEMAND CURVE Consumer Surplus is Total Value Less Payment Money Paid By Consumer price PRICE QUANTITY DEMAND CURVE Consumer Surplus Loss From Price Rise New price Old price Price 3 5 Quantity $3 $15 price $12 price Demand curve for CDs How much did the $3 price rise for CDs hurt John?...
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This note was uploaded on 04/07/2008 for the course ECO 100 taught by Professor R.willig during the Spring '08 term at Princeton.

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Lecture Notes 4 - DEMAND CURVE Total Value to the Consumer...

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