Chapter 5 Applying Consumer Theory
Chapter 5 Applying Consumer Theory. © 2004 Pearson Addison-Wesley. All rights reserved5-2 Figure 5.1 Deriving an Individual’s Demand Curve.
Dec 29, 2015
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Chapter 5
Applying Consumer Theory
© 2004 Pearson Addison-Wesley. All rights reserved 5-2
Figure 5.1 Deriving an Individual’s Demand Curve
© 2004 Pearson Addison-Wesley. All rights reserved
Figure 5.2 Effect of a Budget Increase on an Individual’s Demand Curve
Page 112 Solved Problem 5.1
© 2004 Pearson Addison-Wesley. All rights reserved 5-5
Figure 5.3 Income-Consumption Curves and Income Elasticities
© 2004 Pearson Addison-Wesley. All rights reserved
Figure 5.4 A Good that is Both Inferior and Normal
© 2004 Pearson Addison-Wesley. All rights reserved 5-7
Application (Page 117) Income Elasticities of Demand for Cars
© 2004 Pearson Addison-Wesley. All rights reserved 5-8
Figure 5.5 Substitution and Income Effects with Normal Goods
© 2004 Pearson Addison-Wesley. All rights reserved 5-9
Figure 5.6 Giffen Good
© 2004 Pearson Addison-Wesley. All rights reserved 5-10
Q/UT
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Inferior Good -- Not Giffen
© 2004 Pearson Addison-Wesley. All rights reserved 5-11
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© 2004 Pearson Addison-Wesley. All rights reserved 5-15
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© 2004 Pearson Addison-Wesley. All rights reserved 5-16
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© 2004 Pearson Addison-Wesley. All rights reserved 5-17
Q/UT
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0 X
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BC
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X’ X”
Substitution Effect
N
PIncome Effect
TotalEffect
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© 2004 Pearson Addison-Wesley. All rights reserved 5-18
Figure 5.7 The Consumer Price Index
© 2004 Pearson Addison-Wesley. All rights reserved 5-19
Table 5.1 Cost-of-Living Adjustments
© 2004 Pearson Addison-Wesley. All rights reserved
Figure 5.8 Demand for Leisure
© 2004 Pearson Addison-Wesley. All rights reserved 5-21
Figure 5.9 Supply Curve of Labor
© 2004 Pearson Addison-Wesley. All rights reserved 5-22
Figure 5.10 Income and Substitution Effects of a Wage Change
© 2004 Pearson Addison-Wesley. All rights reserved 5-23
Page 135 Solved Problem 5.3
© 2004 Pearson Addison-Wesley. All rights reserved 5-24
Page 135 Solved Problem 5.3
© 2004 Pearson Addison-Wesley. All rights reserved 5-25
Application (Page 136) Leisure-Income Choices of Textile Workers
© 2004 Pearson Addison-Wesley. All rights reserved 5-26
Figure 5.11a Labor Supply Curve that Slopes Upward and then Bends Backward
© 2004 Pearson Addison-Wesley. All rights reserved 5-27
Figure 5.11b Labor Supply Curve that Slopes Upward and then Bends Backward
© 2004 Pearson Addison-Wesley. All rights reserved 5-28
Figure 5.12 Relationship of Tax Revenue to Tax Rates
Cross-Chapter Analysis (Page 146) Child-Care Subsidies
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