Lecture Notes on Microeconomic Theory ∗ Takashi Kunimoto† Department of Economics McGill University First Version: December 2005 This Version: March 25, 2009 Abstract.…

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Slide 1Public Sector Economics Taxes and Market Distortions – Theory Slide 2 Main Lessons rational foundations of policy distortions how policy distortions are a result…

Welfare Change and Price Indices Change in the price of one good Suppose 1P increases from 0 1 1 1 to P P , other prices remaining constant. How much compensation is needed…

The Marshallian, Hicksian and Slutsky Demand Curves Graphical Derivation In this part of the diagram we have drawn the choice between x on the horizontal axis and y on the…

Chapter 5 Chapter 4. The Theory of DemandPRIVATE Part A, © 2002, Kwan Choi Optimal consumption bundle A consumer’s problem is to choose chose x1 and x2 to maximize U(x1,x2)…