These lecture notes were prepared by xingze wang, yinghsuan lin, and frederick jao specifically for mit opencourseware. Calculating elasticities pdf before watching the lecture video, read the course textbook for an introduction to the material covered in this session. Chapter 4 theory of demand, chapter notes, class 12. Lecture notes for fall 2009 introductory microeconomics brown university. In this section, we use this approach to develop a theory of consumer. Lecture notes consumer behaviour chapter 15 c06 solution manual consumer behavior. This chapter will serve as an introduction to neoclassical growth theory.
Macro notes for money supply, money demand, goods and money markets, and aggregate demand and supply. Introduction the purpose of this section is to delve deeper into the roots of the demand curve, to see exactly how it results from peoples tastes, income, etc. The difference between economic and accounting profit is that accountants only take into. Given money income and price of commodities, consumer plans spending income so as to attain the highest possible satisfaction or utility. Markov and continued in the summer of 2011 students. This section provides lecture notes from the course. Kam yu lu lecture 7 production cost and theory of the firm fall 20 15 28 looking inside the black box governance structure of contracts and organizations williamsons contractual scheme. Thus the equity premium was about 5 percentage points. Treasury bills in the postwar period has been about 1 percent. Reflects totality of consumers decisions with respect to the acquisition, consumption and disposition of goods, services, time and ideas by human decisionmaking units over time. Producer theory perfect competition mark dean lecture notes for fall 2009 introductory microeconomics brown university 1introduction we have now given quite a lot of thought to how a consumer behaves when faced with di.
Consumer theory is concerned with how a rational consumer would make. Read the recitation notes, which cover new content that adds to and supplements the material covered in lecture. Output finputs buys inputs, produces and sells output owner chooses quantities to maximize pro. Consumer s preferences represent his attitudes toward the objects of choice. Rational points on curves pdf, 361 kb lecture notes from a summer school in hayonwye, wales, uk, 2015. Topic 1 lecture notes econ 1 elements of economics foster. Lecture 3 axioms of consumer preference and the theory of choice david autor 14. Scribd is the worlds largest social reading and publishing site. The theory of consumer choice official portal of ukm. Consumer theory mark dean lecture notes for fall 2009 introductory microeconomics brown university 1introduction in this section of the course we will examine the standard methods that economists use to model the behavior of consumers. By a consumer we mean a person who has the opportunity to buy. Lecture notes principles of microeconomics economics.
Perfect complementstwo goods with rightangle indifference curves are perfect complements. Lecture 4 axioms of consumer preference and theory of choice. Descent and covering collections pdf, 290 kb lecture notes from a summer school in ohrid, macedonia. On the other hand, having iii proven, enabled us to construct a proof of iv the. The economic model of consumer choice has 4 ingredients. Consumer behavior cblecture 1 consumer behaviour behavior.
Introduction to asset pricing 1 facts according to aiyagari 1993, the average annual real rate of return on 3month u. Find materials for this course in the pages linked along the left. Consumer preference theory a notion of utility function b axioms of consumer preference c monotone transformations 2. History of economics thought lecture notes production and the social surplus approach by frederic s. Consumer theory is concerned with how a rational consumer would make consumption decisions. Jehle and reny, advanced microeconomic theory, 3rd ed. Lecture notes, consumer behavior textbook mkt 3230 studocu. Ordinal utility ranks utility received from consuming different amounts of goods or baskets of goods. Each individual in each of these groups makes its decisions in order to achieve some goal a consumer seeks to maximize some measure of satisfaction from his consumption decisions while a firm seeks to maximize its profits. Review of supply and demand in the context on minimum wage debate. Econ 1 elements of economics lecture notes foster, ucsd october 09 topic 1 introduction to economics a. The equivalent assumption in the theory of the firm is that firms act to maximize their profits. January 2018 1this lecture notes are for the purpose of my teaching and convenience of my students in class. Papers, preprints and lecture notes by michael stoll.
Lecture 4 axioms of consumer preference and theory of choice 14. Buying having and being exam 9 december 2018, questions and answers exam 8 december, questions and answers exam 9 december 2018, questions and answers exam 8 december, questions and answers. The lecture notes are from one of the discussion sections for the course. Firm is a unit of organization that transforms inputs into outputs. Apr 18, 2016 theory of consumer choice lecture notes economics 1. Online text and notes in principles of macroeconomics. They are derived from the production function, which describes the available efficient methods of production at any one time. Theory elliott ash july 29, 2015 theselecturenotesareanattempttosynthesizethevarioussourcematerialsforthiscourse. Axioms of consumer preference and the theory of choice author. Facilitates estimation of market demand for product market demand is summation of individual demand theory. Notes on the theory of the firm fort lewis college.
Incomplete contracts 1 some contingencies which the parties will face may not be foreseeable at the the contracting date. To represent them formally, we use the at least as good as binary relation %on x. They are based on the textbook by nivenzuckermanmontgomery. Theory of the rm technology cost minimization pro t maximization lets brie y mention one interesting issue before we start. Theory of choice a solving the consumer s problem ingredients characteristics of the solution interior vs corner. Consumer theory preferences and utility utility maximization the primal problem expenditure minimization the dual first we explore how consumers preferences give rise to a utility fct which describes peoples objectives. Note that the tu rises by smaller and smaller amounts the shaded areas. Consumer theory ichiro obara ucla october 8, 2012 obara ucla consumer theory october 8, 2012 1 51. Consumer theory jonathan levin and paul milgrom october 2004 1 the consumer problem consumer theory is concerned with how a rational consumer would make consumption decisions.
These lecture notes are written over a period of a few years, beginning with the summer semester of 2007 for my students enroled in a number theory course r. This basic structure gives rise to a general theory of choice which is. The subtopics for each lecture are related to the chapters in the textbook. Consumer behaviour 14mbamm301 department of mba, sjbit 1 consumer behavior subject code. Lecture notes 3 iv before we start our proof, we want to point out that this statement is a. The marginal rate of substitution is a fixed number. However, we are concerned about what the spot price of co. We will be particularly concerned with market structure and its implications for strategic decision making. Theory of consumer choice lecture notes economics 1.
Shortrun costs are the costs over a period during which some factors of production usually capital equipment. Introduction to present, forwardand futures prices assume that we want to buy a quantity of co. Economic costs implicit costs are opportunity costs example is foregone income. Online text and notes in principles of macroeconomics the. The concept of profit maximization in the theory of the consumer, we assumed that consumers act to maximize their utility. Archived on this site are lecture notes and images used in various courses given by danby. We then consider two alternative ways of attaining the consumers optimum. Cardinal and ordinal utility 11 cardinal utility means that an individual can measure his utility and can attach specific values of utility from consuming each quantity of a good or basket of goods. Modern economics and mathematics, individual decision making, consumer theory, production theory, choice under uncertainty, strategic behavior and markets, game theory, theory of the market, general equilibrium theory and social welfare, normative theory of equilibrium. Here, ks is the quantity of capital that the consumer rents to firms, 1. Solutions to problem sets were posted on an internal website. Figure 5 perfect substitutes and perfect complements.
Apr 18, 2016 theory of the firm lecture notes economics 1. Elementary number theory lecture notes lior silberman. Produces homogeneous commodity technology is represented by a production function. This chapter will focus on the area of consumer behaviour by first considering a.
Axioms of consumer preference and the theory of choice. Theory of choice a solving the consumers problem ingredients characteristics of the solution interior vs corner. In these notes, with the exception of the theorems that assume. The classical idea of monetary neutrality allows us to study the determination of real variables, like output and unemployment, separately from the determination of nominal variables. Accounting costs explicit costs are out of pocket costs example is costs of goods sold.
Their working title at the time was simply the surplus approach. A cookbook of mathematics viatcheslav vinogradov center for economic research and graduate education and economics institute of the czech academy of sciences. Bearing in mind the applied nature of the course, i usually refrained from presenting complete proofs of theoretical statements. Exciting question which unfortuantely we have to postpone.
What makes this problem worthy of separate study, apart from the general problem of choice theory, is its particular structure that allows us to derive economically meaningful results. On stocks, this rate of return has been about 6 percent 4 percent in the last 200 years. Profit is defined as total revenue minus total cost. Lee august 20 the lectures notes were first written in 1986 when i starting teaching a history of thought course at roosevelt university. Lecture 3 axioms of consumer preference and the theory. For any three consumption bundles a, b and c it is valid that if consumer prefers a to b, and he prefers b to c, then he must prefer a to c. Reflects totality of consumers decisions with respect to the acquisition, consumption and disposition of goods, services, time and. Microeconomics of consumer theory the two broad categories of decisionmakers in an economy are consumers and firms. Consumer electronics notes page 4 another type of construction is the sound cell where several crystal elements are. Kam yu lu lecture 7 production cost and theory of the firm fall 20 14 28. Consumer behavior cb lecture 1 free download as powerpoint presentation.