1. Ch 4. Consumers in the Marketplace • Consumption choices change as a function of price and/or income • Price increases – Lead to decreases in quantity demanded –…

1. PREFERENCES AND UTILITY Fundamental Problem of Micro-Economics: satisfying unlimited wants with scarce resourcesWhat a consumer wants (preferences) =>What a consumer…

1. Indifference curve analysis 0 Developed - Edge worth 0 It was later preferred by J.R Hicks & R.J.D. Allen 0 indifference curve approach is also known as ordinalutility…

Slide 1Slide 1Copyright © 2004 McGraw-Hill Ryerson Limited Chapter 4 Individual and Market Demand Slide 2 Slide 2Copyright © 2004 McGraw-Hill Ryerson Limited FIGURE 4-1…

Slide 1Chapter 4 UTILITY MAXIMIZATION AND CHOICE Copyright ©2002 by South-Western, a division of Thomson Learning. All rights reserved. MICROECONOMIC THEORY BASIC PRINCIPLES…

Slide 1Chapter 4 Market Demand and Elasticity Slide 2 2 Market Demand Curves The market demand is the total quantity of a good or service demanded by all potential buyers.…

1. The budget constraint and choice 2. The budget constraint • The basic concept is really straightforward: – The consumer has a limited income (I) to purchase different…

Chapter 4 UTILITY MAXIMIZATION AND CHOICE Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Objective: Choosing among bundles of goods…

Utility Maximization Continued July 5, 2005 Graphical Understanding Normal Indifference Curves Downward Slope with bend toward origin Graphical Non-normal Indifference Curves…

Slide 1 Copyright 2002, Pearson Education Canada1 General Equilibrium and the Efficiency of Perfect Competition Chapter 12 Slide 2 Copyright 2002, Pearson Education Canada2…