1 Substitution Effect, Income Effect, Giffen Goods
1
14.01 Principles of Microeconomics, Fall 2007
Chia-Hui Chen
September 19, 2007
Lecture 7
Substitution and Income Effect, Individual and
Market Demand, Consumer Surplus
Outline
1. Chap 4: Substitutio
Constrained Optimization Survival Guide
John H. Boyd III
August 2003
Maximize utility, minimize costs, maximize prots, maximize welfare, minimize the loss
functionthese are all typical economics problems. Indeed, Lionel Robbins dened economics as the stud
Lecture 20 - Education, Human Capital, and
Market Signaling
14.03 Spring 2003
1
Market Signaling
The previous lectures discussion of the Full Disclosure principle may suggest that markets can often eciently solve information problems. As this
lecture wil
Lecture 7 - In Kind Transfers, Food Stamps,
and the Whitmore Study
14.03, Spring 2003
1
In-Kind Transfers: An application of consumer
theory
There are many in-kind versus cash transfers made by government to
citizens:
Food stamps.
Public housing.
Chil
Lecture 6.2 - Applications: Gien Goods
14.03 Spring 2003
1
The Irish Potato Famine (Dwyer and Lindsay)
In the 1800s, the potato was the staple food of Irish peasantswho were the
majority of Irish.
It contains protein, carbohydrates and vitamin C.
Combin
Lecture 7 - Food Stamps: The Whitmore Study
14.03, Spring 2003
1 The value of food stamps: Policy questions
What are the key policy questions you would want to answer in comparing cash to in-kind food
stamp transfers?
1. Are recipients distorted? That is
| Utility Maximization and Instantaneous Calculations.
LECTURE 7
UTILITY MAXIMIZATION
Utility Maximization: How plausible ?
9 It seems implausible that people are conscious utility maximizers.
AND
For most type of purchases, people do not solve complicate
Lecture 5 - Choice, Demand. Normal and
Inferior Goods
14.03 Spring 2003
Agenda
1. Expenditure function
2. Relationship between Expenditure function and Indirect utility function
3. Indirect Utility function
4. Demand functions
5. Changes in incomes and En
Lecture 4 - Axioms of consumer preference and
theory of choice
14.03 Spring 2003
Agenda:
1. Consumer preference theory
(a) Notion of utility function
(b) Axioms of consumer preference
(c) Monotone transformations
2. Theory of choice
(a) Solving the consum
Lecture 2 - Review of Supply and Demand in
the Context of Minimum Wage Debate
14.03 Spring 2003
Agenda
1. Textbook model of competitive labor market
2. Impact of minimum wage on textbook model
3. Assumptions behind this model
4. What happens when we relax
Lecture 3 - Math Tools
14.03 Spring 2003
Agenda
Optimization
single variable
multi-variable
Implicit Function Theorem and comparative statics
Envelope Theorem: constrained and unconstrained
Constrained optimization (Lagrangian method)
Duality
1
Sin
Lecture 1 - Introduction
14.03 Spring 2003
1
Introduction
What is economics?
A social science of human decision-making, like psychology, sociology, anthropology.
What are the objectives of economics?
1. To develop a systematic knowledge of individual choi
14.06 Lecture Notes
Intermediate Macroeconomics
George-Marios Angeletos
MIT Department of Economics
Spring 2004
Chapter 4
Applications
4.1
Consumption Smoothing
4.1.1
The Intertemporal Budget
For any given sequence of interest rates cfw_Rt , pick an arb
Lectures 1 and 2 - Introduction and a First Application: The
Minimum Wage Debate and Causal Inference in Economics
David Autor
14.03 Fall 2004
1
Introduction to the class
This is an intermediate course in microeconomic theory. I assume that youve all had
14.06 Lecture Notes
Intermediate Macroeconomics
George-Marios Angeletos
MIT Department of Economics
Spring 2004
Chapter 3
The Neoclassical Growth Model
In the Solow model, agents in the economy (or the dictator) follow a simplistic linear
rule for consum
Math Recitation #2 September 29, 2009
I. Utility functi ons
Describes the utility a good gives a certain ind ividual. The function can include many goods that contribute
to utility to different degrees.
U(x,y)=x + y
U(x,y)= xy
U(x,y)=5lnx + 7lny
II. Indif
DUSP 11.203
Microeconomics
Frank Levy
Sept. 16, 2010
NOTES ON CALCULUS AND UTILITY FUNCTIONS
These notes have three purposes:
1) To explain why some simple calculus formulae are useful in understanding utility
maximization, profit maximization and other p
Carnival Cruise Lines
Although sea voyages have held an aura of mystique for centuries, only in recent
decades have the general masses been able to experience open seas and exotic ports of
call as a purely recreational activity. Cruises, i.e., sea voyages
1 Production Possibilities Frontier
1
14.01 Principles of Microeconomics, Fall 2007
Chia-Hui Chen
October 31, 2007
Lecture 20
Production Possibilities Frontier and Output
Market Efficiency
Outline
1. Chap 16: Production Possibilities Frontier 2. Chap
1 Demand and Supply Curves
1
14.01 Principles of Microeconomics, Fall 2007
Chia-Hui Chen
September 7, 2007
Lecture 2
The Basics of Supply and Demand
MARKET
BUYERS = DEMAND SELLERS = SUPPLY
EQUILIBRIUM
Outline
1. Chap 2: Demand and Supply Curves 2. Cha
1 Price Elasticity of Demand
1
14.01 Principles of Microeconomics, Fall 2007
Chia-Hui Chen
September 10, 2007
Lecture 3
Elasticities of Demand
Elasticity. Elasticity measures how one variable responds to a change in an other variable, namely the percent
1 Price Elasticity of Supply
1
14.01 Principles of Microeconomics, Fall 2007
Chia-Hui Chen
September 12, 2007
Lecture 4
Price Elasticity of Supply; Consumer
Preferences
Outline
1. Chap 2: Elasticity - Price Elasticity of Supply 2. Chap 3: Consumer Beh
1 Corner Solution of Optimization
1
14.01 Principles of Microeconomics, Fall 2007
Chia-Hui Chen
September 17, 2007
Lecture 6
Optimization, Revealed Preference, and
Deriving Individual Demand
Outline
1. Chap 3: Corner Solution of Optimization 2. Chap 3:
1 Reducing Risk: Insurance
1
14.01 Principles of Microeconomics, Fall 2007
Chia-Hui Chen
September 28, 2007
Lecture 10
Insurance and Production Function Outline
1. Chap 5: Reducing Risk: Insurance 2. Chap 6: Outline of Producer Theory 3. Chap 6: Product
1 Short Run Production Function
1
14.01 Principles of Microeconomics, Fall 2007
Chia-Hui Chen
October 1, 2007
Lecture 11
Production Functions Outline
1. Chap 6: Short Run Production Function 2. Chap 6: Long Run Production Function 3. Chap 6: Returns to
1 Returns to Scale
1
14.01 Principles of Microeconomics, Fall 2007
Chia-Hui Chen
October 3, 2007
Lecture 12
Production Functions and Cost of Production Outline
1. Chap 6: Returns to Scale 2. Chap 6: Production Function Derivation 3. Chap 7: Cost of Prod