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Chapter 4 More Demand Theory

Chapter 4 More Demand Theory

Chapter 4 More Demand Theory. The Law of Demand. The law of demand implies an inverse relationship between price and quantity demanded. When the price and quantity of a good are positively related, the good is called a Giffen Good. Income and Substitution Effects.

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460 views • 29 slides
Consumer Surplus

Consumer Surplus

Consumer Surplus. Demand function:. Demand Curve:. Demand Function and Demand Curve. Consider a demand function The inverse demand function is. Cobb-Douglas example:. Inverse Demand Function. Inverse Demand Curve. Optimal choice: Suppose: (composite good) Rearrange:.

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616 views • 24 slides
Measuring Welfare Changes of Individuals

Measuring Welfare Changes of Individuals

Measuring Welfare Changes of Individuals. Exact Utility Indicators Equivalent Variation (EV) Compensating Variation (CV) Relationship between Exact Utility Indicators and Consumer Surplus (CS) How accurate an approximation of utility change is CS? See Zerbe and Dively, Chapter 5.

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540 views • 22 slides
Measuring Welfare Changes of Individuals

Measuring Welfare Changes of Individuals

Measuring Welfare Changes of Individuals. Exact Utility Indicators Equivalent Variation (EV) Compensating Variation (CV) Relationship between Exact Utility Indicators and Consumer Surplus (CS) How accurate an approximation of utility change is CS? See Zerbe and Dively, Chapter 5.

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282 views • 21 slides
Introduction to Microeconomics (L11100)

Introduction to Microeconomics (L11100)

Introduction to Microeconomics (L11100). Section 3: Consumer Welfare and Household as Supplier. Lectures 8 - 11. Outline. 3.1 Compensating and Equivalent Variations in Income (Lecture 8) 3.2 Consumer Surplus (Lecture 9) 3.3 Labour Supply (Lecture 10) 3.4 Dynamic Consumption (Lecture 11).

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364 views • 13 slides
Introduction to Microeconomics (L11100)

Introduction to Microeconomics (L11100)

Introduction to Microeconomics (L11100). Section 3: Consumer Welfare and Household as Supplier. Lectures 8 - 11. Outline. 3.1 Compensating and Equivalent Variations in Income (Lecture 8) 3.2 Consumer Surplus (Lecture 9) 3.3 Labour Supply (Lecture 10) 3.4 Dynamic Consumption (Lecture 11).

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240 views • 13 slides

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