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Lecture 2

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pranitsingh524's version from 2016-09-11 18:39

Section

 

To do

 

PPt
Question Answer
what is consumer behavior?the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.
what does s.t. stand for?subject to
what is the symbol for maximizing utility or satisfaction?U
what is the basic equation of consumer behavior?max(x,y) s.t. I ≥ PxX + PyY
what is the symbol for what bundle you prefer?> < or ~
Prefers A to bundle BA > B
Prefers B to bundle AA < B
what is the symbol for no preference (Indifferent) b/w bundles A & BA ~ B
what is the indifference curve?a curve on a graph (the axes of which represent quantities of two commodities) linking those combinations of quantities that the consumer regards as of equal value.
what does the indifference curve tell us?the combinations of 2 or more goods that give a consumer the same level of satisfaction (utility)
what does a higher indifference curve indicate?higher level of utility (satisfaction)
what is utility?satisfaction
what is the slope of an indifference curve called?Marginal Rate of Substitution
what is preference in economics? what does it result in?the ordering of alternatives based on their relative utility; optimal "choice"
memorize

 

In class Lecture
where does demand come from?
explain the empirical record
things aren't always as they seem

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